It is almost as obvious as saying that night follows day and Spring follows Winter that the administration of the Tax Act is full of oddities.

One of these oddities relates to the payment of travelling expenses, especially within the building industry, where expenses are automatically paid to workers whether they travel or not. This is a long term hangover from a hard fought industrial issue which is now impossible to get rid of.

The general rule for tax deductibility is that the money has to be actually spent before you get a tax deduction. That is the general rule to which is added the further issue of self assessment coupled with substantiation. If a Tax inspector comes calling you are expected to be able to substantiate your expenses.

To stop Australia being cluttered with millions of Woolworths dockets the ATO allow claims of up to $300 without documentary evidence. This does NOT mean without substantiation, although a great many taxpayers believe so.

The travelling allowance referred to above provides yet another opportunity to make a claim without documentary evidence

However a deduction is allowed for part of this payment, without any receipts required, if a claim is made at the rate that was allowed in certain awards 25 years ago.

Substantiation means that proof is required. If the claim is made at the same rate that applied in the 1986 Award no proof is required.

That’s odd but I still think that the greatest oddity in the Act is the non deductibility of the expense of getting to and from work.