Private ruling: Work related travel and self education expenses
Date of advice: 13 March 2017
Published: August 2017
Ruling period: Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 1 July 2014

Ruling: Q1: Can you claim the motor vehicle expenses for travel between your campsite and your work location as a deduction for income tax purposes? | A1: No. | Q2: Can you claim motor vehicle expenses for travel between the campsite and TAFE as a deduction for income tax purposes? | A2: Yes.

Relevant facts and circumstances: You are employed in a specific industry at a remote site. You maintain your prime residence in a capital city and live in a camp owned by your employer while you are at work. Your employer pays for your onsite camp accommodation, as well as your fly-in/out costs. Because of your position, you have to be at the work area before the start of a shift. The employer provides transport for workers to and from camp to the worksite. You are not able to catch the rostered transport. You have provided your own private motor vehicle so that you can travel from the camp site to the workplace. You park your vehicle at the campsite even when you fly home to your prime residence. You also attend training sessions at the local TAFE. You have been in your current position for several years. Your employer expects you to undertake the courses, as they directly relate to your occupation. Your employer pays for the courses, and you attend them during normal working hours, with pay. You have undertaken the courses to maintain your occupational role. Both you and your employer believe the courses have an adequate connection to your current employment and improve the skills you require to perform your current job. The course relates to your current employment and will result in an increase in income once completed.

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

Reasons for decision: Detailed Reasoning - Travel to work: 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 relate to the earning of exempt income or a provision of the taxation legislation excludes it. Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or it is not an expense incurred in gaining or producing assessable income. While on your shift, you reside at the campsite provided by your employer. You travel from there to work. The travel is undertaken to get you to work, not on work, and so is private in nature. It is essentially the same as a person travelling from their home to work, and is private in nature. Accordingly, the expenses are not deductible under section 8-1 of the ITAA 1997. | Detailed Reasoning - Travel to TAFE: Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business, discusses the circumstances under which self-education expenses are allowable as a deduction. A deduction is allowable for self-education expenses if a taxpayer's current income-earning activities are based on the exercise of a skill or some specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge ( Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60, (1961) 12 ATD 348). In your case, it is accepted that the courses at TAFE will maintain and enhance the skills that are required in the performance of your current employment duties. Consequently the self-education expenses incurred have the necessary and relevant connection with the earning of your assessable income and are therefore deductible. | Detailed Reasoning - Travel expenses relating to self-education: Paragraph 160 of TR 98/9 provides that a deduction is allowable for motor vehicle and travel expenses in connection with a course of education in the following situations: ● the cost of travel between home and the place of education and then back home ● the first leg of the trip, if a taxpayer travels from home to the place of education and then on to work (the cost of travelling from the place of education to work is not a self-education expense) ● the first leg of the trip, if a taxpayer travels from work to a place of education and then home (the cost of travelling from the place of education to home is not a self-education expense) ● the cost of travel between work and the place of education and then back to work. Put simply, when you use a car or public transport, you can claim the cost of travelling from your: ● home to your place of education and back, and ● work to your place of education and back. However, you cannot claim the cost of the last stage of your travel from: ● home to your place of education, and then to work ● work to your place of education, and then to your home. Your travel from your campsite to the TAFE and back is considered to be a self-education expense. However when you travel directly from work to the TAFE then to the campsite, only the first part of the trip from work to the TAFE is considered an allowable self-education expense.