Private ruling: Work related expenses
Published: August 2012
Ruling period: Year ended 30 June 2012.
Date scheme commenced: 1 July 2011

Ruling: Questions and answers | Are you entitled to a deduction for expenses incurred in home to work travel? | No. | Are you entitled to a deduction for accommodation expenses? | No.

Relevant facts and circumstances: You worked interstate for several months during the income year. You travelled between your home and your place of work interstate during this time. You incurred travel and accommodation expenses.

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, or relate to the earning of exempt income. | Detailed Reasoning - Travel expenses: 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 the costs associated with travel by employees from home to work is deductible. Taxation Ruling IT 2543 summarises these situations as follows: · the taxpayer's home constitutes a place of employment and travel is between two places of employment or business · the taxpayer's employment can be construed as having commenced before or at the time of leaving home · the taxpayer has to transport by vehicle bulky equipment necessary for employment · the taxpayer's employment is inherently of an itinerant nature · the taxpayer is required to break his or her normal journey to perform employment duties (other than including incidental duties such as collecting newspapers, mail, etc.) on the way from home to the usual place of employment, or from the place of employment to home. In your case, you worked interstate for a number of months. You travelled between your home and your place of work interstate during this time. The expenses you have incurred are as a result of living in one place and working in another. Your situation is not similar to any of the situations listed at points (a) to (e) above and is therefore not a situation where home to work travel expenses are deductible. Therefore, the cost of travel between your home and your work is a private expense and you are not entitled to a deduction for these expenses. | Detailed Reasoning - Accommodation expenses: Generally, 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. Your accommodation expenses are of a private and domestic nature, which were incurred to enable you to work. They were not incurred during the actual performance of your work i.e. during the production of assessable income. Therefore, your accommodation expenses are not deductible under section 8-1 of ITAA 1997.

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