Private ruling: Travel, meals and accommodation
Published: September 2014
Ruling period: Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016 | Year ended 30 June 2017 | Year ended 30 June 2018
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for travel between your home and City B? | A1: No. | Q2: Are you entitled to a deduction for accommodation and meals in City B? | A2: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 25-100 | Income Tax Assessment Act 1997 Subsection 25-100(3)

Reasons for decision: Summary: Your travel, accommodation and meal expenses are considered to be private in nature and are not deductible as City B is considered to be a second work location and your travel is to work and not on work. | Detailed Reasoning - Travel: 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). The expenditure must be related to the production of assessable income and not incurred at a point too soon to be deductible ( Federal Commissioner of Taxation v. Maddalena 71 ATC 4161; (1971) 2 ATR 541 and Steele v. Deputy Commissioner of Taxation (1999) CLR 459; 99 ATC 4242; (1999) 41 ATR 139). 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 of simply commuting between home and place of work are generally not deductible (Income Taxation Ruling IT 112 Deductibility of travelling expenses between residence and place of employment or business ). Expenses incurred in travelling directly between two places of business or a place of employment and a place of business are an allowable deduction where the taxpayer does not live at either of the places and the travel was undertaken for the purpose of enabling the taxpayer to engage in income producing activities (Income Tax Ruling IT 2199 Income Tax: Allowable Deductions: Travelling Expenses Between Place(S) Of Employment And/Or Place(S) Of Business ). Section 25-100 of the ITAA 1997 allows deductions for travel between workplaces where: • The taxpayer is an individual; • The expense is a transport expense; and • The expense is incurred in travel between workplaces. However, subsection 25-100(3) of the ITAA 1997 specifies that travel between two places is not travel between workplaces if one of the places you are travelling between is a place at which you reside. In your case you reside at one of the places you work. Therefore you are not entitled to a deduction for the travel between your place of residence and City B. This includes all modes of travel plus associated costs. | Detailed Reasoning - Accommodation and meals: Accommodation and meal expenses are normally private or domestic in character. However, where a taxpayer is away from home overnight in connection with an income producing activity, meal expenses are deductible. The expenditure is not considered private because its occasion is the taxpayer's travel away from home on income producing activities. In considering the deductibility of travel expenses, a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties that the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194). TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses states at paragraph 81 states that an employee may be regularly employed at one site on some days and another on other days. In both cases, the normal work place is where the employee performs normal duties. The Ruling also provides an example for Rani who is a doctor who works at three medical clinics. Over a period of two weeks she works four days at one clinic and three days each at the other clinics. The travel between home and any of these locations is travel to and from her normal work place. It is private and no deduction is allowable. We acknowledge that each component of your job must be done in its own location. However, the expenses that you incur for accommodation and meals in City B are as a result of having two normal places of work and the expenses are not deductible.

You work in City B for part of each week. This work is approximately 40% of the whole job. | You work the balance of your time from home. | The work you do in City B cannot be done from home and the work you do from home cannot be done in City B. | You incur expenses for travel to and from City B plus accommodation and meals.