Airport lounges are a haven for business travellers, providing free Internet access and places to work, meet and recharge your devices – but did you know that Qantas Club and Virgin Lounge memberships can actually be a tax deduction?
According to the Australian Taxation Office, lounge memberships purchased by businesses on behalf of their travelling employees are ripe for a write-off, even if occasionally used by staff on their private holidays.
That’s because “the primary function of Airport Lounge Clubs is to provide business facilities and prompt and efficient services relating to the travel of their members,” says the ATO.
“Hospitality, such as food, drink and recreation, is merely incidental to the primary function of these clubs. The Airport Lounge Club is also not considered to be a recreational club, and the fees are not excluded from deductibility on this basis,” the ATO continues.
Sole traders buying their own Qantas Club or Virgin Lounge memberships for use on business trips are also believed to enjoy similar deduction privileges.
On the other side of the coin, employees of businesses with ‘no-frills’ travel policies may instead need to cover their own fees if airport lounge access is desired.
Like many income tax deductions that have both personal and business applications, you’d generally deduct only the portion of the expense that relates to your income-earning activities, rather than the total cost as you could with a business.
For instance, if 80% of your lounge visits were on work trips and the remaining 20% on leisure trips, your deduction could be as high as 80% of the total membership fee.
Whatever the case, be sure to consult your accountant or tax professional for advice on how the ATO’s rules and regulations apply to your particular circumstances.
This article is not published or intended as personal financial advice.
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