Private ruling: Travel, meal and accommodation expenses
Published: November 2013
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 June 2013

Ruling: Q1: Are you entitled to a deduction for expenses in travelling between your home and work? | A1: No. | Q2: Are you entitled to a deduction for expenses in travelling directly between two work sites? | A2: Yes. | Q3: Are you entitled to a deduction for expenses in travelling to and from an area that has mobile phone services when you are required to make work related phone calls? | A3: Yes. | Q4: Are you entitled to a deduction for expenses incurred for meals from Monday to Friday? | A4: No. | Q5: Are you entitled to a deduction for expenses incurred for meals when you are required to be away from home for work purposes for extended periods? | A5: Yes. | Q6: Are you entitled to a deduction for your accommodation when required to sleep away from home for work purposes? | A6: Yes. | Q7: Are you entitled to a deduction for your DVD player? | A7: No. | Q8: Are you entitled to a deduction for the cost of your work related calls made on your phone? | A8: Yes. | Q9: Are you entitled to a deduction for your trailer or recovery equipment? | A9: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 25-100

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or a provision prevents you from deducting it. Travel expenses - home to work Generally a deduction is not allowable for the cost of travel between home and work as it is considered a private expense. Expenditure incurred in travelling to work is a prerequisite to the earning of assessable income rather than being incurred in the course of producing that income. Such expenses are incurred as a consequence of living in one place and working in another. That is, the essential character of the expenditure is of a private or domestic nature, relating to personal and living expenses and therefore not an allowable deduction. ( Lunney v. FC of T ; (1958) 100 CLR 478 and Federal Commissioner of Taxation v Cooper (1991) 29 FCR 177; 91 ATC 4396; 21 ATR 1616). The essentially private character of travel between home and work is not affected by factors such as the mode of transport, the availability of transport, the lack of suitable public transport, the erratic times of employment, the time of travel, the distance of travel and the necessity of travel (Taxation Ruling IT 2543). Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example, unless a person arrives at work it is not possible to derive income. The income earning duties do not generally commence until the arrival at a place of work and will cease upon departure from work. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income ( Case V111 88 ATC 712). Section 25-100 of the ITAA 1997 allows a deduction for the cost of travelling directly between two workplaces. However, subsection 25-100(3) of the ITAA 1997 states that travel between two places is not travel between workplaces if one of the places you are travelling between is a place at which you reside. In your case you travel from home to your work site. Your travelling expenses are a prerequisite to the earning of assessable income and are not incurred in producing that income. The making of a phone call before leaving home or when you get home after work does not change the nature of your home to work travel. While your specific circumstances are acknowledged, it is not considered that your travel to and from the work site is work related travel. Rather it is private travel carried out to enable you to commence your duties. The distance of the travel or the fact that you do extended shifts do not alter the private nature of the travel. Additionally, subsection 25-100(3) of the ITAA 1997 specifically denies a deduction in your circumstances. Therefore, the associated travel expenses between home and work are not an allowable deduction. Travel expenses - between two work sites The expenses you incur for travelling directly between two work sites are sufficiently connected to the earning of your assessable income and are therefore an allowable deduction. Similarly, where you are required to phone your employer and need to travel to obtain mobile phone services, then the associated travel expenses are an allowable deduction. Meal expenses Expenditure on the daily necessities of life (for example, food and drink) is generally not deductible as it is not incurred in gaining or producing assessable income and is also considered to be private or domestic in nature. Exceptions to this are where you are undertaking work related travel and are required to stay away overnight or you work overtime and receive an overtime meal allowance. Taxation Ruling TR 95/18 discusses meal expenses for truck drivers. Although you are not a truck driver, the principles in this ruling are relevant in your situation. Paragraph 95 of TR 95/18 denies a deduction for the cost of meals even where a truck driver works long hours. The exception to this however, is outlined in paragraph 99 of TR 95/18 which states, 'a deduction is allowable for the cost of meals if the truck driver is required to sleep away from home as the meal would be part of a travel expense.' In Case E34 5 TBRD (NS) 205; 4 CTBR (NS) Case 99, J L Burke (Chairman) stated (TBRD at 205; CTBR at 587: '...where the taxpayer maintained a domestic establishment and where her employment caused her to move away from that establishment for periods of indefinite duration, I am prepared to find that expenses incurred on hotel accommodation and meals whilst the taxpayer was absent from her headquarters, if I may use the term, were not of a private or domestic nature.' The conclusion reached in that case was, because the income-earning activities of the position required the taxpayer to sleep away from home, the expenses incurred on accommodation and meals were an allowable deduction. Therefore the Commissioner allows a deduction for the cost of meals where a taxpayer is required, by their work, to sleep away from their home. Meal expenses incurred when away from home for more than 24 hours and a person is required to sleep away from home overnight are generally an allowable deduction. In your case your weekend shift requires you to be away from home for more than 24 hours. Such circumstances are not different to any other taxpayer who is required to travel away from home overnight, and the meal expenses incurred will be an allowable deduction. It is considered that the expenditure incurred on such meals is incurred in gaining or producing your assessable income. The cost of meals is therefore deductible under section 8-1 of the ITAA 1997. You are therefore entitled to a deduction for the cost of meals that are consumed on those shifts that you are required to sleep at the work site. However, on any occasions where you are away from home for less than 24 hours, the cost of meals are a private expense and not deductible. Accommodation TR 95/18 discusses a case which involved workers who were paid a camping allowance by their employer as they were required to camp at a work site each day. The work site was too far away for the workers to commute to the site. They stayed at the site for a period of five days and returned home on the weekends. None of the workers spent inordinate periods of time in the camps so that the camp did not become their home Roads and Traffic Authority Of NSW V FC of T ( RTA case) 93 ATC 4508, (1993) 26 ATR 76 (1993) 116 ALR 482 (1993) 43 FCR 223. In RTA case Hill J said (ATC at 4521; ATR at 92; FCR AT 240) 'Where a taxpayer is required by his employer, and for the purposes of his employer, to reside, for periods at a time, away from home and at the work site, and that employee incurs expenditure for the cost of sustenance, or indeed other necessary expenditure which, if the taxpayer had been living at home, would clearly be private expenditure, the circumstance in which the expenditure is incurred, that is to say, the occasion of the outgoing operates to stamp that outgoing as having a business or employment related character.' It was decided that a deduction would have been allowable for meals and camping expenses if the expense had been incurred by the employees while away from home. Similarly, in your case, as your duties require you to sleep away from home, the expenses of your bedding incurred for such periods are deductible. Therefore you are entitled to a deduction for your tarpaulin, lights, bedding and other sleeping expenses incurred while staying and sleeping overnight at the work site. Phone expenses A deduction is allowed for the cost of work related phone calls made. Therefore the cost of the calls made to the manager and other people in the course of carrying out your duties are an allowable deduction. DVD, trailer and recovery equipment A DVD is regarded as a private and recreational item. The associated expenses including batteries do not have a sufficient connection to your income earning activities, therefore no deduction is allowable for your DVD or batteries used to operate the DVD. As your travel between home to work is private in nature, the cost of your trailer and recovery equipment are also private in nature and not sufficiently connected to your assessable income. It is not regarded as a deductible accommodation or meal expense and therefore no deduction is allowed for your associated trailer costs.

Relevant facts: You work night shift during the week. | You travel to the work site in the afternoon, then after each night shift you return home. | On the weekends you travel to the site and stay on site for more than 24 hours. | The site locations may change from week to week. | Sometimes it takes more than one hour to travel to your work site. | The work sites are in remote areas. | You carry everything you need in your car and trailer. | You incur costs for repairs and registration for your trailer. | You carry recovery equipment so you can get yourself out of trouble if you get stuck in travelling to and from work. | You also have to carry all your food, water and equipment you require whilst working. | You are required to log in by telephone before leaving your house and log off by telephone when you return home. You use your own phone. | On the weekends you phone in each day to inform the company that you are OK. | You use the phone to call the manager and other people as required. | Some of the sites you work on do not have mobile phone service available, so you have to drive to a location where there is service to log in on the weekends. | Sometimes you work on two sites and travel between these sites throughout the day and night. | As some of the work sites have no facilities or accommodation provided. You use your own car and a tarpaulin as shelter from the heat, rain, wind and cold, as there is not generally enough room to pitch a tent on site. You also take bedding and a DVD player. | You are not paid a travel, meal or phone allowance. | You keep records and receipts of your expenses.