Private ruling: Work related expenses - home to work
Published: September 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for taxi fares for travel from home to work? | A1: No

Relevant facts and circumstances: Your driver's licence was suspended due to a medical condition. Rather than receive sickness benefits you continued to work. You were required to commence work early in the morning and as there was no public transport to your place of employment at that time you were required to use a taxi service. You incurred travel cost to get to work.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature. A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties (see paragraph 77 of Taxation Ruling TR 95/34). It is irrelevant that public transport may not be available. In Case R22, 84 ATC 212 the Board of Review disallowed a claim for travel expenses where a tanker driver used his private car to travel to work in the early hours of the morning because there was no available public transport. Although the expenditure was an essential prerequisite for the derivation of assessable income, its character as travelling expenses between home and place of work was neither relevant nor incidental to the tanker driver activities in gaining or producing assessable income. Similarly in your case, your driver's licence was suspended and as there was no public transport at the time you were required to commence work, you chose to travel to work by taxi. The expenses incurred on taxi fares are regarded as home to work travel. As such your travel expenses are a pre-requisite to earning your income and the expenses are not incurred in gaining or producing your assessable income. You were travelling to work and not travelling as part of your work. Therefore, you are not entitled to a deduction for travel expenses under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.