Today we’re looking at whether a trip overseas with some business activities can be claimed as a work expense. This is a common query for us at Accountech as many clients travel for both personal and business reasons.
According to the Inland Revenue Department (IRD) guidelines, if the primary purpose of your trip is personal, then the entire cost of the trip cannot be claimed as a work expense. However, if the trip involves business activities, you may be able to claim a portion of the trip as a work expense.
To calculate the proportion of the trip that can be claimed as a work expense, you will need to determine the ratio of business days to the total days of the trip. This calculation will allow you to claim expenses such as transport, accommodation, and meals for the business portion of the trip. At Accountech, we use a simple google sheet to calculate this.
It's crucial to keep detailed records of your trip expenses, including receipts, invoices, and supporting documentation, and maintain a diary of your business activities during the trip. This information will help you substantiate your claim if required. We recommend Google Docs and Hubdoc!
However, claiming travel expenses can be a complex process, and it's advisable to seek professional advice from an Accountech tax expert to ensure that you are compliant with all relevant requirements.
If you're planning a trip overseas with some business activities, you may be able to claim a portion of the trip as a work expense, provided the primary purpose of the trip is not personal. Remember to keep detailed records and seek professional advice to ensure compliance with NZ tax requirements.