Claiming car, travel, and accommodation expenses for locum doctors is quite challenging and complex. The expense to travel to remote, rural, or interstate areas by a locum doctor is generally claimable.

According to the ATO guidelines, a locum doctor can claim expenses when directly travelling between two or more separate workplaces, or from your regular workplace to an alternative workplace – assuming none of them is your home.

Travelling for personal reasons cannot be claimed at all.

Case Study Of A Locum Doctor

Recently, a taxpayer locum doctor working in Victoria and New South Wales, and residing in Melbourne was denied the travel deduction. The taxpayer also worked as an assistant surgeon in Melbourne as a sole trader.

During the 2015–16 income year, the taxpayer worked away from home providing locum medical services for 247 days and performed duties as an assistant surgeon in Melbourne 49 times.

His home in Melbourne was his primary place of business, where he conducted working in respect of past and prospective business. He used 2 cars for running his sole trading business and travel for locum medical work purposes.

The Exact Tax Paying Scenario

The taxpayer declared in his income tax return for the relevant year a taxable income of $275,264. After completing an audit of the taxpayer’s work-related expense claims for that year, the Commissioner disallowed a car expenses deduction of $6,600 as well as $42,701 of the $43,366 claimed for “other work-related expenses”. The taxpayer was issued with an amended assessment increasing his taxable income to $325,706 and shortfall interest charge was also imposed.

The taxpayer objected to the amended assessment, the Commissioner disallowed the objection and the taxpayer sought review.

The Conclusion

In view of the taxpayer’s request for assessment, The Administrative Appeals Tribunal (AAT) has affirmed that the car expenses incurred by him were not deductible as they were not incurred in gaining or producing income or in carrying on a business.

The AAT noted that the rule for deductions for travel between two workplaces was also not applicable for any travel undertaken. The car expenses incurred when the taxpayer travelled from his home to perform his work as an assistant surgeon were private home to work travel and therefore, not deductible.

Get Advice

As a locum doctor, it is very important to seek advice from a qualified accountant when filing a travel deduction or claim. At KPG Taxation, we understand taxes like no other can and are happy to assist you anytime you need.