Private ruling: Travel expenses - Fly in fly out employee
Published: August 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for taxi and airfare expenses you incur in travelling to and from your home and work? | A1: No

Relevant facts and circumstances: You are employed and your place of employment is in a different state to your place of residence. You carry no tools of trade with you on your journeys to and from work. You only carry items such as your work clothing, other general clothing and toiletries. You incur expenses for taxis and airfares for a portion of your journey between your home and your work. Your employer pays for your travel expenses for a portion of your journey between your home and your work. You have not been reimbursed by your employer for any of the taxi or airfare expenses that you have incurred.

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. 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 that the taxpayer's expenses can be deducted. The fact that certain expenditure, such as travelling to work, must be incurred in order to be able to derive assessable income, does not necessarily mean that the expenditure is incidental and relevant to the derivation of assessable income. It is a prerequisite to the earning of assessable income rather than being incurred in the course of gaining that income. The essential character of the travel to and from work is that of a private and domestic nature, related to personal and living expenses as part of the taxpayer's choice of where to live, in choosing to live away from and what distance from work. In your case, you have incurred expenses for taxis and flights for a portion of the journeys between your home and your work on a regular basis. This travel is incurred in order to put you in a position to perform your duties of your employment; it is not incurred in the performance of the duties of your employment. The expenses you incur in travelling by taxi and plane between your home and work are private in nature. Therefore, you are not entitled to a deduction for these expenses under section 8-1 of the ITAA 1997. It should be noted that the significant distance travelled is irrelevant as the law does not differentiate between, nor apply on the basis of, distances travelled.