Private ruling: Expenses - travel - home to work
Published: November 2011
Ruling period: Year ending 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for travel between your home and your workplaces interstate? | A1: No

Relevant facts and circumstances: You are a doctor. In the 2011 income year you worked as a locum for several different employers interstate. You arranged the work yourself, through an agency. You incurred expenses travelling from your home and your interstate workplaces. You worked for periods varying from 1 to 2 weeks before returning home. Each of your interstate employers provided accommodation for you. When you travelled you carried your laptop and reference books, as well as clothes for yourself.

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 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. 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. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166 ( Lunney's Case )). 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, rather than in performance of those duties (see Taxation Ruling TR 95/34). Generally, the duties of an employee will not commence until the arrival at a place of work and will cease upon departure from work. The mode of transport, the distance of travel, the frequency of travel and the necessity of travel are not factors which will alter the essential character of travel between home and work. However, there are situations where it has been accepted that travel by employees from home to work is deductible. This is where: · the employee's home constitutes a place of employment and travel is to a workplace to continue work · the employee's employment is inherently of an itinerant nature · travel is between two places of employment · the employee has to transport by vehicle bulky equipment necessary for employment. | Detailed Reasoning - Home constitutes a place of employment: In your case, there is nothing to suggest that your home constitutes a place of employment. | Detailed Reasoning - Employment is inherently of an itinerant nature: In your case, you were only travelling to the various employers' premises and then returning home after each job placement. There is nothing to suggest that your employment is inherently of an itinerant nature. | Detailed Reasoning - Travel between two places of employment: As already stated, your home does not constitute a place of employment and your places of employment were interstate. Therefore, you are not travelling between two places of employment when travelling between states. | Detailed Reasoning - Transporting bulky equipment necessary for employment: In your case, you have stated that you carried a laptop and reference books when you travelled to work as a locum interstate. These items would not constitute bulky equipment. In conclusion, the costs you have incurred for travel expenses to travel between your home and your various workplaces interstate are considered to have been incurred for travel between home and work. These expenses are a prerequisite to the earning of your assessable income and are not incurred in producing that income. Therefore, the costs you have incurred are as a consequence of living in one place and working in another and were incurred to enable you to commence, or return home after completing, your income earning activities and are considered private in nature and are not deductible.

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