Private ruling: Travel expenses
Published: October 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for meal and car expenses? | A1: No


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 or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a 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 one 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). The issue of expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location was considered in FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 ( Toms' Case ). In Toms' Case , the taxpayer was a forest worker who during the working week lived in a caravan in a bush camp 108 kilometres from his family home in Grafton. He claimed it was too far to travel each day to his work in the forest, so that it was necessary to establish a caravan at the camp. He would return home on weekends. He claimed the costs of maintaining his caravan and other living expenses such as the cost of heating and lighting. It was held that the expenses incurred in relation to the temporary accommodation near the workplace while maintaining a family residence in another location were dictated not by his work but by private considerations, and therefore were not deductible. In your case, you were working and living in City B for a number of weeks. It is considered that during this period you were living away from home for work rather than travelling on work. That is, during this period you were living in City B and you travelled because your work location had been moved for that period. Travel was not a part of your actual work duties. As you were not travelling in the course of carrying out employment duties, no deduction is available for the travel and meal expenses you incurred when working away from your usual place of residence. Further to this the essential character of your expenditure is of a private or domestic nature. The expenses incurred by you to stay in close proximity to your work-place were a prerequisite to the earning of assessable income and were not expenses incurred in the course of gaining or producing that income.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You are employed in a particular profession and your normal workplace is in City A. | For a number of weeks you were rotated to work in City B, returning to your normal workplace in City A at the end of this period. | The City B employer issued a PAYG payment summary showing an amount for secondment and travel. | You were provided with accommodation but you were still required to pay an amount per fortnight for accommodation. This amount was taken from your wages. | During this period you made a number of trips by car from your home to City B and return.