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Destructibility on Penalty Fee on Entertainment Transport but Cancelled

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Hi,

 

My company booked an entertainment activity for the company to attend, but then the event was latter cancelled. When booking the event, we also booked a coach for transportation between work and the event place. As a result of the event been cancelled, the coach company refunded us 80%. 

My question is, now that the 20% is not attached to entertainment, or anything, is it tax deductible?

 

Regards,

SWANG

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ATO Certified

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Hi @SWang,

 

Thanks for your question!

 

In order for the amount to be deductible, you have to be able to show how it related to the business. If all of your records support that it was intended to be part of an entertainment expense, it's likely that it would remain non-deductible.

 

This is the same even if the expense is now unrelated to anything to do with the business, because there will be no proof of what the expense was for.

 

Hope this helps,

 

Rachael B.

1 REPLY 1
Highlighted

Best answer

ATO Certified

Community Support

Replies 0

Hi @SWang,

 

Thanks for your question!

 

In order for the amount to be deductible, you have to be able to show how it related to the business. If all of your records support that it was intended to be part of an entertainment expense, it's likely that it would remain non-deductible.

 

This is the same even if the expense is now unrelated to anything to do with the business, because there will be no proof of what the expense was for.

 

Hope this helps,

 

Rachael B.