Flight Centre Travel Group’s Corporate Traveller cautions bleisure travellers amid ATO crackdown

We believe the ATO’s focus will be particularly relevant for bleisure travellers, with flight bookings showing Australian business travellers now spend double the global average time on business trips, averaging six nights compared to the global average of just 3.5.  In addition, our flight bookings for FY24 reveal that January leads the year for bleisure travel, with travellers averaging 7.2 nights away. September follows, with an average of 6.5 nights away across all bookings. July is the third most popular month for bleisure travel, with an average of 6.2 nights away.

In addition, our flight bookings for FY24 reveal that January leads the year for bleisure travel, with travellers averaging 7.2 nights away. September follows, with an average of 6.5 nights away across all bookings. July is the third most popular month for bleisure travel, with an average of 6.2 nights away. To help support Australian bleisure travellers claim the right expenses amid the latest advice from the ATO – particularly that any work-related expense must have a direct connection with the business earning an income – we and FCTG’s Moneywise offer crucial guidance to business travellers1.

Tempted to take your client golfing while enjoying a bleisure trip? You can claim it, says Tuohy, but only if the purpose of the expense is income-generating business related.

A key tip from Moneywise Global General Manager John Tuohy is to hold off filing your taxes until you are fully prepared, otherwise you may risk being audited.

“What most people don’t realise is that employees have until 31 October to file the 2024 financial year’s taxes. If you register with a tax agent, that deadline is extended until mid-May 2025, which is great for those who want to delay any tax payable,” said Mr Tuohy. “So don’t rush it unless you know your tax is relatively simple and you’re expecting a refund.

“There are over 14,000 pages of tax law in Australia, meaning there are lots of incentives and terms and conditions, and with the ATO focussing this year on work-related expenses, it’s particularly important to take that time to get it right, and to understand the nuances to avoid audit triggers.”

Tom Walley, Australia-based Global Managing Director for Corporate Traveller, adds that with robust business travel trends and the reduction in flight costs in 2024,    the appetite for bleisure travel is anticipated to grow. However, he cautions, “This tax season business travellers should take extra care to avoid scrutiny,” Mr Walley said.

As business travellers in Australia make plans for leisure events such as the Paris Games, which will impact tax reporting for next year, it’s vital to remember to keep accurate and detailed records. Mr Walley adds, “Keeping on top of your documentation should be a priority for every business traveller. This proactive approach will help you manage your tax obligations while travelling, and ensure you are compliant with Australian tax laws.”

Mr Tuohy said in the area of tax regulations, especially for work travel deductions in the context of bleisure, there were five crucial insights business travellers need to know this year:

1. A holiday is not a work trip and, sadly, it’s not a tax deduction either – but if you’re blending work and leisure, keep a travel diary for those work expenses.

“If you’re intending to mix business with pleasure, be sure to keep your records, including scanned copies and summaries of your expenses.”

Bleisure travel is very popular with Australian travellers, and attending a conference and adding additional sightseeing is a good example of this trend. “Travellers should keep a travel and expense diary. Often, appropriate annotations in your calendar tool noting dates, times, durations and places of work-related activities will suffice as a 'travel diary' for tax purposes and will substantiate deductions for specific and associated expenses,” he said.

“In cases where leisure travel is 'incidental' to a business trip, more of the trip expenses, such as accommodation and meals, will be allowable as deductions.”

2. Weekend accommodation can be deductible when business extends from Friday to Monday.

John adds that incidental and reasonable travel deductions can include Saturday and Sunday accommodation when necessary for business requirements on a Friday and the following Monday.

“Taking a partner or family on these trips would incur expenses that are clearly of a private nature, such as additional accommodation, meal and entertainment expenses. Don't be tempted to claim these on your tax. Similarly, when you extend travel for leisure before or after a work travel requirement, you will be expected to apportion the leisure component to private and non-deductible expenses,” he says.

3. You can include legitimate client entertainment expenses - but only if the real purpose is business.

Tempted to take your client golfing while enjoying a bleisure trip? You can claim it, says Tuohy, but only if the purpose of the expense is income-generating business related.
“Discussing business between parties, a project or negotiating a business outcome is more likely to be deductible. These cases would likely be covered by the employer and reimbursed, and this is more relevant to business owners than employees,” he said.  

4. You can’t claim day travel.

Even if it is interstate, the ATO will not give rise to a tax-deductible claim, he warns. Apart from work-related kilometre deductions in your personal vehicle, Tuohy adds that public transport, parking, tolls, taxi/rideshare, flights, meals and other incidental expenses that aren’t reimbursed by your employer, will only be tax deductible when they are associated with an overnight work trip. Again, he says, most employer arrangements will allow these as reasonable expense claims and you should only be lodging tax deduction claims for specific expenses which have not been reimbursed to you.

5. Don’t double dip on those travel work claims.

Tuohy says most out-of-pocket work expenses will indeed be reimbursed by your employer or the business, so avoid the temptation to ‘double dip’ and potentially attract ATO attention.  However, when it comes to daily travel allowances (‘per diems’) and mileage travelled in your own car for work, make sure you do claim for your tax deduction entitlement. Employers will often code these as tax assessable allowances to the ATO and you do need to complete your tax return for actual expenses incurred using travel allowances, and lodge deductions for kilometres travelled for work in your own car. 

Corporate Traveller FY2024 flight booking data

Disclaimer: The advice given in this article is general in nature and not intended to influence readers' decisions about financial products or specific personal tax considerations. Before making any financial decisions, readers should consider their own circumstances and seek advice from a registered tax agent or qualified financial adviser. 

About Flight Centre Travel Group

The Flight Centre Travel Group is one of the world’s largest travel retailers and corporate travel managers. The company, which is headquartered in Brisbane, Australia, has company-owned leisure and corporate travel business in dozens of countries, spanning Australia, New Zealand, the Americas, Europe, the United Kingdom, South Africa, the United Arab Emirates, and Asia. ASX listed Flight Centre Travel Group (FLT) also operates the global FCM corporate travel management network, which extends to more than 100 countries through company-owned businesses and independent licensees, along with Corporate Traveller, the flagship business specific to the small-to-medium-sized enterprise sector. For more information, visit fctgl.com.