Private ruling: home to work travel
Published: September 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for home to work travel? | A1: 

Relevant facts and circumstances: You are employed on a part time basis which involves you taking part in legal proceedings. You submit that there is an expectation that you will undertake a significant part of your work in relation to your position at your home address. You are supplied with files in relation to legal proceedings either in hardcopy or by PDF which you read and review before and after the legal proceedings. You have been given no alternative location at which to complete this work. On the day of the proceedings you review the case and then travel to the designated location of the legal proceedings and then home again where you complete further work. You are not supplied any alternative workplace in which to undertake your duties. You incur costs in relation to train fares, bus fares, motor vehicle expenses and parking fees travelling from your home and the location of the proceedings.

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. The cost of travelling between home and work is generally not an allowable deduction as it is not incidental and relevant to the derivation of assessable income, being a prerequisite to the gaining of producing of such income. Taxation Ruling IT 2199 provides guidelines on circumstances in which travelling expenses are deductible. Generally, travel directly between two places of employment are deductible where the taxpayer does not live at either of the places and the travel has been undertaken for the purpose of enabling the taxpayer to engage in income producing activities. However, where the taxpayer lives at one of the places of employment, it is necessary that the taxpayer's home should constitute an employment or business. The cost of travel between the home based employment and employment located elsewhere must be part and parcel of the income producing activities. Paragraph 6 of IT 2199 states that it is rare for a home to represent a place of employment and it is not sufficient that a room in the home is used in association with an employment or business conducted elsewhere. Taxation Ruling TR 93/30 discusses situations in which a home constitutes a place of business. Whether a home constitutes a place of business is influenced by: · the essential character of the area · the nature of the taxpayer's business · any other relevant factors · the area constituting a "place of business" in the ordinary and common sense meaning of that term. Paragraph 12 of TR 93/30 states that the absence of an alternative place for conducting income producing activities has also influenced a court or tribunal to accept a part of a taxpayer's residence as a place of business. Examples include: · a self employed script writer using one room of a flat for writing purposes and for meetings with television station staff · an employee architect conducting a small private practice from home · a country sales manager for an oil company whose employer did not provide him with a place to work. In your case, you review the cases from your home and then travel to the tribunal location. You then return home to further review the case and prepare your decision. You are provided with no alternative location or office space to carry out the significant amount of preparation/review work you are required of you. It is considered that based on the guidelines in IT 2199 and TR 93/30, your home is a place of employment and that the travel between your home and tribunal locations is part of the operations by which you produces assessable income. As such you are entitled to a deduction for the costs of journeys between your home and tribunal locations.

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