Private ruling: Work related expenses
Published: December 2013
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Can you claim a deduction for expenses incurred for taxi fares home after work as a work related expenses? | A1: No.

Relevant facts and circumstances: You recently commenced a position that requires you to work some nights after all public transport has ceased. You don't have a driver's license and are required to catch a taxi to get home.

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 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. Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless a person arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166 ( Lunney's Case )). A deduction is, generally, not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel between home and work is generally incurred to put the employee in a position to perform duties, or after the cessation of their duties, rather than in performance of those duties (see Taxation Ruling TR 95/34). The lack of suitable public transport, the erratic hours and times of employment, the time of travel and the distance of travel are not factors which will alter the essential character of travel between home and work as a private expense. Therefore, the costs you have incurred for taxi fares to return home after completing your income earning activities and are considered private in nature and are not deductible.