Private ruling: Travel expenses
Published: April 2015
Ruling period: 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 2014

Ruling: Q1: Are you entitled to a deduction for the expenses incurred attending your employer's head office? | A1: No.

Relevant facts and circumstances: Your employer has agreed to a flexible working arrangement. You are able to work from your own fully functioning office within your private residence which is located in City A. Your employer will require you to go to the head office in City B from time to time as per the direct orders of your employer. You must supply your own transport from your residence to the head office, your own accommodation and meals.

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. Generally, travel and accommodation expenses incurred by an employee who lives away from home to carry out the duties of his employment will not be deductible. Expenses of this nature have been found to be private or incurred before or after the activity of earning assessable income. Meal expenses are also inherently private in nature and generally not deductible. In FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466, the Federal Court held that expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location were not an allowable deduction as they were considered to be private expenses. In FC of T v. Charlton 84 ATC 4415; (1984) 15 ATR 711, it was stated that if a taxpayer chooses to reside far away from where he earns his income he will incur travelling expenses to his place of employment (and may even incur temporary accommodation expenditure) in addition to the expenditure on his actual home. These expenses will not be deductible as they are private in nature. In your case, you perform some of your employment duties at your home office. You are required to attend your employer's head office in another city when requested and you are required to pay for your own travel, accommodation and meals. However, the travel is not related to the duties you perform, and you are not travelling 'on' work. Rather the reason for the travel is that you have chosen to live in an area that is not in close proximity to your employer's office. You are travelling 'to' work rather than 'on' work. Accordingly, your travel, accommodation and meal expenses are considered to be of a private and domestic nature and are not deductible under section 8-1 of ITAA 1997.