Private ruling: Travel expenses
Date of advice: 30 July 2015
Published: July 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Are you entitled to a deduction for the cost of your airfares to and from work? | A1: No.

Relevant facts and circumstances: You are employed by a mining company as an interstate fly-in fly-out worker. You were employed knowing your home base was City A and your place of employment was at City B. Your contract does not state where your fly-in fly-out airport or base of operations is. Your employer took out extra insurance to cover you for work cover travel from City A. You did not transport any bulky equipment.

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. 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). 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 of employment, rather than in the performance of those duties. (see paragraph 77 of Taxation Ruling TR 95/34) However, there are situations where it has been accepted that travel by employees from home to work is deductible. These situations include: • where the employment can be construed as having commenced at the time of leaving home, for example a doctor on call, • where you travel between home and shifting places of work, that is, an itinerant occupation, and • the transportation of bulky equipment in some circumstances. In your situation, your work has not commenced before leaving home, you are not considered itinerant and you do not carry bulky work equipment. Even though your employer has taken out extra insurance to cover you for your travel, you are not on work during this time instead you are travelling to work to commence your work duties. Therefore, the expenses that you incur when travelling between home and work are not deductible.