Wheat grows on a farm at sunset in the flooded midwestern New South Wales town of Forbes, Australia September 27, 2016. Reuters/Jason Reed

The Australian Taxation Office (ATO) has disallowed a farmer's tax return after claiming that he was an itinerant worker. The farmer Glen Walker claimed that travel was an inherent part of his work and he was entitled to deductions for his travel.

He made two principal submissions regarding his claim. He stated that he was an itinerant farm worker on the first principal submission. According to Walker, he was entitled to deductions for his travel, accommodations, groceries and meals while on circuit. In his second submission, he stated that if he was found not to be an itinerant worker, accommodation and meals should be deductible. He said that he was living away from home on a temporary basis due to work purposes which served as the basis for the claim and the travel expenses should be deductible as well in respect to travel between workplaces.Written and oral evidence were presented but inaccuracies were found. However, intention to misled the information was not considered.

In connection with the travel dispute, Administrative Appeals Tribunal (AAT) found that farmer’s travel activities between different farms were not regular.The tribunal found out that some of the travel-related activities were made for personal reasons such as fetching his wife.

Walker's claim worth $3,000 over two financial years was denied by AAT. The farmer's tax affairs were audited that led to ATO's decision to issue amended assessments, to impose penalties for failing to take reasonable care and to disallow the deductions.

Tribunal deputy president Ian Molloy said that it was Walker's choice to live and work where he did. He said that the farmer's circumstances were clearly distinguishable from the employees who were compelled by their employers to spend money on accommodation and other expenses. Molloy said that he was not satisfied that the internet and telephone expenses of the farmer were outgoings that can be claimed as deductions.

ATO said that employees should take note of the three golden rules for claiming all work-related expenses. The first rule stated that the money spent came from a personal budget and was not reimbursed. The second rule stated that the expenses must be directly related to earning an income while the last rule stated that record of expenses was needed to serve as a proof.

Larger than expected claims would be possible but further questions would be necessary and evidence of the actual expenditure must be presented. Individuals were advised to ensure that there was a direct connection between expenses and the performance of employment duties when claiming self-education expenses. They should also be aware of the claims in relation to overtime meal allowance.

Australian Taxation Office guide to get the right deductions video