As a locum doctor, you may find you are spending more on travel, meals and incidental expenses. However, not all of these expenses are necessarily tax deductible.

The decision from a recent case demonstrates what you can and can’t claim if you are a locum doctor travelling for work.

Case Background

  • A locum doctor was based in Melbourne but spent 70% of his time working in regional hospitals around NSW during the 2016 financial year;
  • An agency organised his locum work including handling flights, accommodation and meal allowances;
  • The doctor attempted to claim deductions for $6,600 in car expenses for trips to and from the hospital and airport; and
  • The doctor also attempted to claim deductions of $43,366 for meal and incidental expenses when working away from Melbourne.

The Administrative Appeals Tribunal (AAT) ruled that neither the car expenses or meal and incidental expenses could be claimed.

Car expenses were deemed non-deductible as the taxpayer’s duties did not start until he reached the hospital, and hence were not incurred in the course of producing assessable income.

Meal and incidental deductions were also rejected as the taxpayer incurred these expenses due to personal circumstances. These living expenses incurred while on the road were deemed personal and private in nature due to the distance the taxpayer lived from his usual workplace.

When can you claim car and accommodation expenses?

Locum doctors can claim car expenses when travelling between two separate workplaces. Additionally, a deduction is allowed if you travel from your regular workplace to an alternative workplace. Both of the above assume the workplace is not your home. Generally, it is very difficult as a doctor to argue that your home is your primary place of business.

The tax law views the trip from home to work as a private expense and is therefore not deductible, as this occurs before you start earning assessable income. If you are travelling for a personal reason in conjunction with your work, you may only claim a deduction on the work portion of your travel.

To claim accommodation expenses the following conditions must be met:

  • The location of your permanent home must be significantly away from your workplace;
  • The expenses cannot be incurred as a result of you choosing to reside in a location that is different from your work location;
  • You must be away for only short stints of time; and
  • Your employment duties must require you to be at that specific location.

Learn more

If you have questions about which travel expenses are deductible, please contact Kristy Baxter or Janelle Kiernan from Pilot’s medical services division on taxmed@pilotpartners.com.au or (07) 3023 1300.