Private ruling: deduction of travel expenses
Published: February 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 01 July 2011

Ruling: Q1: Are you entitled to a deduction for travel expenses incurred for travel between your home and your temporary workplace? | A1: No.

Relevant facts and circumstances: You are employed and usually work in an inner city location. In 2011 and 2012 you were required to work in another city and you commuted there daily from your home. The distance from your home to the temporary workplace is greater than the distance to your usual workplace. Your circumstances during this time were that you were not: · required to carry bulky tools or equipment for use at work, · using your home as a base of employment, · shifting places of employment each day, · travelling between two separate places of employment, · travelling between your normal workplace and an alternative workplace.

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 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, rather than in performance of those duties (see Taxation Ruling TR 95/34). In your case, you incurred expenses to travel between your home and your temporary workplace in order to attend work. These expenses are a prerequisite to the earning of assessable income. Although your reason for working at the temporary workplace was to complete a period of secondment, this does not alter the fact that these expenses are of a private nature and are incurred as a necessary consequence of living in one place and working in another ( Lunney's Case ). Therefore, they are not incurred in gaining or producing your assessable income and are not deductible.

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