Private ruling: Deductions - Car Expenses
Published: June 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to claim a deduction for travelling between your workplaces? | A1: Yes

Relevant facts and circumstances: You work for an employer that operates from two locations. At the direction of your employer you work part the week at each location and this arrangement is ongoing. Your employer pays you a travel allowance. When travelling between the work locations you transport work items and documents at the direction of your employer. On the days that you travel you work at your usual workplace before and after travelling.

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 general deduction for 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. For expenditure to be regarded as being incurred in the course of gaining or producing assessable income, it must be incidental and relevant to that end ( Ronpibon Tin NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; 8 ATD 431; (1949) 4 AITR 326). Expenses incurred in travelling are deductible expenses where they are incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. Expenses incurred in travelling directly between two places of employment are an allowable deduction. This is confirmed in Taxation Ruling IT 2199 Income Tax: Allowable deduction: Travelling expenses between places(s) of employment and/or places of business which discusses the deductibility of expenses incurred in travelling between places of employment. IT 2199 at paragraph 4 also states that such travel is an allowable deduction. In your case, it is considered that with your work arrangement you have two places of employment and that you travel between these places of employment.