Private ruling: Work related motor vehicle expenses
Published: September 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to claim a deduction for motor vehicle expenses for travel between your home and your employer's alternative workplace and directly home again? | A1: No

Relevant facts and circumstances: You work for only one employer. The head office of your employer is in a suburb of a city, this is your main workplace. Your employer has an alternative workplace, in another suburb of the same city, where you go every week. You state that it is not regular, but you go there if necessary. On these occasions, you travel from home to the alternative workplace and directly home again. You are not in receipt of a car allowance from your employer.

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

Reasons for decision: Detailed Reasoning - Detailed reasoning: 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. Generally, a deduction is not allowable for the cost of travel between home and work as this travel is considered to be of a private or domestic nature. These expenses are incurred as a consequence of living in one place and working in another. In Lunney v. FC of T (1958) 100 CLR 478 ( Lunney's Case ) the Full High Court laid down the principle that for a deduction to be allowable it is not enough for the expenditure to be an essential prerequisite to the derivation of assessable income. In that case it was held that the costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. In your case, the costs you have incurred for travel expenses between your home and your employer's alternative workplace and home again are considered to have been incurred for travel between home and work. This is because the employer's alternative workplace is a semi-regular place of employment for you. As such, 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. The expenses were not incurred in the producing your assessable income and are therefore considered private or domestic in nature and are not deductible.

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