Private ruling: Work related expenses - home to work travel
Date of advice: 7 December 2022
Published: 6 February 2023
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 XX 20XX

Ruling: Q1: Are you entitled to a deduction for travel to and from your home and work whilst you were on temporary higher duties at your employer's office in Town B? | A1: No.

Relevant facts and circumstances: You are employed as an Assistant Manager with a government agency. You commenced your employment with your employer in October 20XX. You are normally based at your employer's office in Town A. In 20XX, you commenced a period of temporary higher duties acting in the role of Manager at the Town B Office of your employer for a period of four weeks. You did not receive a travel allowance from your employer for travelling to the Town B Office whilst you were on higher duties. Your home is not your place of employment. You are not required to carry bulky equipment as part of your employment. You are not required to be on call as part of your employment.

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

Reasons for decision: Summary: As outlined in paragraph 7 of Taxation Ruling TR 2021/1 Income Tax: when are deductions allowed for employees' transport expenses? an employee can only deduct a transport expense under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) to the extent that: • They incur the expense in gaining or producing their assessable income; • The expense is not of a capital, private or domestic nature; • The expense is not incurred in gaining or producing exempt income or non-assessable non-exempt income, and • A provision of the Income Tax Assessment Act 1997 does not prevent it from being deducted. A deduction is generally not allowable for the cost of travel between home and your regular place of work, because it is considered to be 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. That is, the duties of an employee do not commence until the arrival at a place of work and will cease upon departure from work. 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 Federal Commissioner of Taxation [1958] HCA 5). However, a deduction may be allowed for home to work travel expenses in certain exceptional circumstances, for example where you are required to travel to a location other than your regular place of work. This situation is discussed in more detail in paragraphs 42 to 47 of TR 2021/1. In your case, you took a temporary higher duties assignment acting as the Manager of the Town B office of your employer for a period of four weeks. During this time, the Town B office became your regular place of work where you started and finished your work duties. Consequently, you are not able to claim your travel between home and the Town B office as a deduction.