We received notice last night of a tax office response to a court case held last year, which determined that a travel agent was able to claim the significant costs of overseas travel to further his knowledge base and thus increase his income from his regular employment.

If you’ve got the time and inclination, you can read about it, here; Carlos Sanchez v Commissioner of Taxation.

Whilst this may not necessarily be directly related to your own circumstances (although I know that there are one or two agents reading this), these sorts of things do provide interesting insight about the thought processes at tax office and how they deal with these sorts of issues.

In this case, the travel agent in question earned a little under $40k in the 2005 year (made of retainer, commissions and bonuses), which increased to some degree in the following two. The agent also claimed around $10k in travel expenses – a good quarter of his income – despite being on annual leave at the time and receiving no allowance from his employer.

The tribunal stated;

The Tribunal was satisfied that the applicant’s calling as a travel sales consultant required degrees of knowledge and skill that would benefit from personal experience of the travel components he sold to his customers, and that the 2005 overseas travel directly contributed to that knowledge and skill, and also contributed (or was likely to contribute) to his earning increased income.

The Commissioner accepted this view and allowed the majority of the deduction. It is important to note that the agent took comprehensive notes during his travels and this contributed strongly to the treatment of his case. It’s also important to note that the tax office eventually disallowed a good portion of the agent’s claims on the basis that he could not properly substantiate them. So even though the basis of the claim was decided to be alright, the tax office still went through with a fine tooth comb to make sure that the actual cost could be proven.

So! Lessons to be learned from this, in all of your potential deductions; keep damn good records. And if you’re doing something significant, keep extensive notes about the how and why of what you’re trying to achieve. It might seem a little painful at the time (especially if you’re supposed to be out exploring Spain instead – for research, of course) but it may count for a lot in the long run.