Private ruling: Travel expenses
Published: February 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for travel expenses incurred to travel to the location of the new employment contract? | A1: No.

Relevant facts and circumstances: You are employed. You were required to fly interstate for a short term employment contract. You incurred travel, accommodation and taxi expenses to travel to the location of where the contract will be undertaken.

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 allows a deduction for all losses and outgoings to the extent to which they are incurred in the course of gaining or producing assessable income, but are not allowable to the extent that they are of a capital, private or domestic nature. Case law has determined that expenses of travelling to work are not deductible as they are not incurred in gaining the assessable income, but as a pre-requisite to gaining assessable income ( Lunney v FC of T; Hayley v FC of T (1958) 100 CLR 478). In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel that the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194). In your situation, you are considered to be travelling to work and as such the expenditure incurred is not an allowable deduction.