Hall and Commissioner of Taxation [2025] ARTA 600
Document type: Interim Decision Impact Statement
Venue: Administrative Review Tribunal (2022/8986)
Judgment date: 21 May 2025
Date published: 29 April 2026

Summary of decision:
1. This Interim decision impact statement outlines the ATO's interim response to Hall and Commissioner of Taxation [2025] ARTA 600, which considered whether an employee sports presenter and producer (taxpayer) was entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for occupancy expenses, and a deduction under section 28-12 of the ITAA 1997 for car expenses claimed in the income year ending 30 June 2021 (relevant income year). | 2. Deputy President Thompson determined that the taxpayer was entitled to a deduction in the relevant income year for both the occupancy expenses and car expenses. | 3. This decision is currently subject to appeal to the Federal Court of Australia. | 4. All decision references in this Interim decision impact statement are to the decision of Hall and Commissioner of Taxation [2025] ARTA 600 unless otherwise indicated. | 5. All legislative references in this Interim decision impact statement are to the ITAA 1997, unless otherwise indicated.

Overview of facts:
8. During the relevant income year, the taxpayer was employed full time as a sports presenter and producer by the Australian Broadcasting Corporation (ABC) in Melbourne. [2] | 9. On relocating to Melbourne with his wife in June 2020, the taxpayer rented a 2-bedroom apartment in his own name. [3] The second bedroom was to be used as a place for him to work from home. Prior to moving to Melbourne, the taxpayer was advised by his manager that he would need to work from home when he moved there. [4] | 10. During the relevant income year Melbourne was subject to mandatory lockdowns ordered by the Victorian Chief Health Officer due to the COVID-19 pandemic. [5] The taxpayer worked at home for part of his duties due to these lockdowns and subsequent employer directions. [6] | 11. The taxpayer's role with the ABC had 2 quite distinct parts: • ABC Sport Digital Radio station (Digital Role), which comprised 75% of his employment related duties [7] , and • producing ABC live sports broadcasts (Live Role), which comprised the remainder of his employment-related duties – the Live Role could only be undertaken at his employer's premises in Southbank (Southbank Studios). [8] | • ABC Sport Digital Radio station (Digital Role), which comprised 75% of his employment related duties [7] , and • producing ABC live sports broadcasts (Live Role), which comprised the remainder of his employment-related duties – the Live Role could only be undertaken at his employer's premises in Southbank (Southbank Studios). [8] | 12. During the relevant income year, the restrictions imposed by the Victorian Chief Health Officer and his employer prevented [9] him from attending his usual place of employment (Southbank Studios) to perform the Digital Role. He was only allowed to attend the Southbank Studios to undertake the Live Role. [10] | 13. The taxpayer's usual work week was from Thursday to Monday. His general pattern of work was a mix of either [11] : • solely performing his duties at home (Digital Role) • commencing his Digital Role duties at home and then travelling to the Southbank Studios to undertake his Live Role duties, or • a variety of the 2 roles depending on the sporting season. | • solely performing his duties at home (Digital Role) • commencing his Digital Role duties at home and then travelling to the Southbank Studios to undertake his Live Role duties, or • a variety of the 2 roles depending on the sporting season. | 14. The taxpayer asserted that he undertook his Digital Role from a laptop in the second bedroom of his rented apartment. [12] This room was solely used for this purpose as he needed a quiet place to work from. [13] The room was only sparsely furnished, which included a small desk, a dining chair and a bookcase. [14] There was nothing to separate or distinguish that space from the rest of the apartment. | 15. The taxpayer's wife was a yoga instructor who continued her work by doing classes online. The classes were conducted from the main living area of the apartment. [15] | 16. To support his claims for a deduction for occupancy expenses (representing a portion of his rent attributable to the home office space) and car expenses for travel between his home and the employer's premises, the taxpayer contended that: • it was beyond his control where he worked, and he had to do the majority of his work from home [16] , and • he could only perform part of his employee duties at the employer's premises. | • it was beyond his control where he worked, and he had to do the majority of his work from home [16] , and • he could only perform part of his employee duties at the employer's premises. | 17. The taxpayer drove from his home to the Southbank Studios in his private car to undertake his Live Role. [17] | 18. The taxpayer sought to claim a deduction in the relevant income year of: • $5,878.87 for occupancy expenses [18] for his home office, and • $1,148.40 for car expenses [19] for travel for work from his home to the Southbank Studios on the days he undertook both the Digital Role and the Live Role. | • $5,878.87 for occupancy expenses [18] for his home office, and • $1,148.40 for car expenses [19] for travel for work from his home to the Southbank Studios on the days he undertook both the Digital Role and the Live Role. | 19. At audit and at objection, the taxpayer was denied, in full, a deduction for both expenses. | Issues decided by the Tribunal | 20. The Tribunal confirmed that the taxpayer bears the onus of proof that the 'assessment is excessive or otherwise incorrect, and what the assessment should have been' for the relevant income year. [20] | Issue 1 – whether the occupancy expenses were incurred in gaining or producing assessable income | 21. The Tribunal noted that the past cases on claiming occupancy expenses for a home office have only been allowed in very limited circumstances. [21] | 22. Notwithstanding this, the Tribunal formed the view that during the relevant income year as result of the Victorian Government-imposed restrictions and those of his employer [22] , the second bedroom was the taxpayer's main workplace for that year and he was entitled to a deduction for occupancy expenses. [23] | 23. The Deputy President inferred that the taxpayer rented the 2-bedroom apartment with the intention of using the second bedroom for work, stating that it was 'notable' that the taxpayer rented the apartment when he moved to Melbourne with the knowledge that it would be his workplace, at least for the foreseeable future. [24] | 24. The Commissioner's position was that the occupancy expenses sought to be deducted are not deductible as they are: • not outgoings that have a sufficient nexus with the taxpayer's employment income to be deductible under the first (positive) limb of section 8-1, and • outgoings of a 'private or domestic nature' and fail the deductibility test under the second (negative) limb of section 8-1. | • not outgoings that have a sufficient nexus with the taxpayer's employment income to be deductible under the first (positive) limb of section 8-1, and • outgoings of a 'private or domestic nature' and fail the deductibility test under the second (negative) limb of section 8-1. | 25. In reaching its decision, the Tribunal did not agree with the Commissioner and determined that the occupancy expenses were deductible as the evidence established that the taxpayer's main workplace for the entire relevant income year was the second bedroom, it was necessary for him to work there [25] , and the expense was not purely of a private or domestic nature. [26] | 26. The Deputy President was careful in restricting the implications of this decision to the specific facts at hand, by stating that [27] : ... This decision has no impact on what can be claimed by Mr Hall in any later year of income, which would need to be assessed based on the facts which prevailed at that later time. | Issue 2 – whether the car expenses were incurred in gaining or producing assessable income | 27. The Tribunal stated that travelling to work is not enough to be eligible for a deduction for car expenses. [28] A critical factor is whether the employee had commenced their employment duties prior to undertaking the travel for which they are seeking a deduction. [29] | 28. The Tribunal also noted that the taxpayer had some unique aspects to his working arrangements [30] : • he only had one employer but had 2 distinct roles (Digital Role and the Live Role) which were respectively undertaken from his home and the Southbank Studios, sometimes on the same day, and • his employment was not arranged in 2 shifts split between different aspects of his role. | • he only had one employer but had 2 distinct roles (Digital Role and the Live Role) which were respectively undertaken from his home and the Southbank Studios, sometimes on the same day, and • his employment was not arranged in 2 shifts split between different aspects of his role. | 29. The key in reaching a decision was 'whether he had commenced his working day at his primary workplace, his home', on the days that the taxpayer sought to claim a deduction for travel from his home to the Southbank Studios or another venue [31] where he undertook his Live Role. [32] | 30. The Commissioner's position was that the car expenses sought to be claimed were not deductible [33] as the taxpayer did not travel 'business kilometres' 'in the course of' producing his assessable income as required by paragraph 28-25(3)(a). | 31. The Tribunal accepted that the taxpayer: • had kept reasonable records to base his claim on • had commenced his work on the relevant days from his home prior to travelling to the Southbank Studio (or another venue) and back home (that is, all his claimed car expenses were 'on work' [34] ), and • was therefore entitled to claim the car expenses. | • had kept reasonable records to base his claim on • had commenced his work on the relevant days from his home prior to travelling to the Southbank Studio (or another venue) and back home (that is, all his claimed car expenses were 'on work' [34] ), and • was therefore entitled to claim the car expenses.

Issues decided:
20. The Tribunal confirmed that the taxpayer bears the onus of proof that the 'assessment is excessive or otherwise incorrect, and what the assessment should have been' for the relevant income year. [20] | Issue 1 – whether the occupancy expenses were incurred in gaining or producing assessable income: 21. The Tribunal noted that the past cases on claiming occupancy expenses for a home office have only been allowed in very limited circumstances. [21] 22. Notwithstanding this, the Tribunal formed the view that during the relevant income year as result of the Victorian Government-imposed restrictions and those of his employer [22] , the second bedroom was the taxpayer's main workplace for that year and he was entitled to a deduction for occupancy expenses. [23] 23. The Deputy President inferred that the taxpayer rented the 2-bedroom apartment with the intention of using the second bedroom for work, stating that it was 'notable' that the taxpayer rented the apartment when he moved to Melbourne with the knowledge that it would be his workplace, at least for the foreseeable future. [24] 24. The Commissioner's position was that the occupancy expenses sought to be deducted are not deductible as they are: • not outgoings that have a sufficient nexus with the taxpayer's employment income to be deductible under the first (positive) limb of section 8-1, and • outgoings of a 'private or domestic nature' and fail the deductibility test under the second (negative) limb of section 8-1. • not outgoings that have a sufficient nexus with the taxpayer's employment income to be deductible under the first (positive) limb of section 8-1, and • outgoings of a 'private or domestic nature' and fail the deductibility test under the second (negative) limb of section 8-1. 25. In reaching its decision, the Tribunal did not agree with the Commissioner and determined that the occupancy expenses were deductible as the evidence established that the taxpayer's main workplace for the entire relevant income year was the second bedroom, it was necessary for him to work there [25] , and the expense was not purely of a private or domestic nature. [26] 26. The Deputy President was careful in restricting the implications of this decision to the specific facts at hand, by stating that [27] : ... This decision has no impact on what can be claimed by Mr Hall in any later year of income, which would need to be assessed based on the facts which prevailed at that later time. | Issue 2 – whether the car expenses were incurred in gaining or producing assessable income: 27. The Tribunal stated that travelling to work is not enough to be eligible for a deduction for car expenses. [28] A critical factor is whether the employee had commenced their employment duties prior to undertaking the travel for which they are seeking a deduction. [29] 28. The Tribunal also noted that the taxpayer had some unique aspects to his working arrangements [30] : • he only had one employer but had 2 distinct roles (Digital Role and the Live Role) which were respectively undertaken from his home and the Southbank Studios, sometimes on the same day, and • his employment was not arranged in 2 shifts split between different aspects of his role. • he only had one employer but had 2 distinct roles (Digital Role and the Live Role) which were respectively undertaken from his home and the Southbank Studios, sometimes on the same day, and • his employment was not arranged in 2 shifts split between different aspects of his role. 29. The key in reaching a decision was 'whether he had commenced his working day at his primary workplace, his home', on the days that the taxpayer sought to claim a deduction for travel from his home to the Southbank Studios or another venue [31] where he undertook his Live Role. [32] 30. The Commissioner's position was that the car expenses sought to be claimed were not deductible [33] as the taxpayer did not travel 'business kilometres' 'in the course of' producing his assessable income as required by paragraph 28-25(3)(a). 31. The Tribunal accepted that the taxpayer: • had kept reasonable records to base his claim on • had commenced his work on the relevant days from his home prior to travelling to the Southbank Studio (or another venue) and back home (that is, all his claimed car expenses were 'on work' [34] ), and • was therefore entitled to claim the car expenses. • had kept reasonable records to base his claim on • had commenced his work on the relevant days from his home prior to travelling to the Southbank Studio (or another venue) and back home (that is, all his claimed car expenses were 'on work' [34] ), and • was therefore entitled to claim the car expenses.

ATO view of decision:
32.This decision was appealed to the Full Federal Court which supports the ATO views in the following public advice and guidance dealing with the deductibility of occupancy expenses and work-related transport expenses: • Taxation Ruling TR 93/30 Income tax: deductions for home office expenses • Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses? • Employees guide for work expenses . | • Taxation Ruling TR 93/30 Income tax: deductions for home office expenses • Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses? • Employees guide for work expenses . | 33. As a general rule, expenses associated with a taxpayer's home, such as rent, are of a private or domestic nature and do not qualify as deductions for taxation purposes. An exception to this general rule is where part of the home is used for income-producing activities and has the character of a 'place of business', and the expense loses its essential character as private or domestic. Subject to the outcome of the appeal, in our view, the mere fact that a room in the house has been set aside during the circumstances of COVID-19 lockdowns for work purposes is not sufficient to enable a deduction for a portion of the rent. | 34. The cost of travel from home to a regular place of work is not deductible (subject to very limited exceptions). The mere fact that an employee undertakes some work duties at home does not make expenses of travel to their regular place of work deductible. This is because these expenses are not incurred in gaining or producing assessable income as they are a prerequisite to earning assessable income. In our view, this treatment will not change even if the travel occurs during work hours. Subject to the outcome of the appeal, we do not consider that the circumstances of COVID-19 lockdowns requiring some work to be undertaken at home changes this outcome. | Commissioner of Taxation 25 June 2025

Administrative treatment:
6. This decision was appealed to the Full Federal Court. That Court's decision [1] supports the ATO views set out in paragraph 32 of this Interim decision impact statement. Pending the outcome of any appeal process from that decision, we will continue to administer the law in accordance with the Full Court's decision. | 7. Our response to the decision of the Full Federal Court is contained in the Interim decision impact statement for Commissioner of Taxation v Hall [2026] FCAFC 43.

Legislative references: ITAA 1997 8-1 ITAA 1997 28-12 ITAA 1997 28-25
Case references: Commissioner of Taxation v Hall [2026] FCAFC 43 2026 ATC 21-010
Other references: Employees guide to work expenses Interim decision impact statement on Commissioner of Taxation v Hall [2026] FCAFC 43