Private ruling: Home to work travel expenses
Published: June 2014
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 home to work travel expenses (or any part thereof)? | A1: No.

Relevant facts and circumstances: You have a medical condition and are unable to drive. You work erratic hours, as well as working on weekends and public holidays. Public transport is not always available when you need to travel to and from work. You travel to and from work by taxi when public transport is not available.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1

Reasons for decision: Summary: You can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income except where the loss or outgoing is capital or private in nature (section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)). The expenses of travelling between home and a place of work are generally not deductible as these expenses are of a private nature ( Lunney v. FC of T (1958) 100 CLR 478 ( Lunney's Case )). Lunney's Case considered the issue of whether fares paid by taxpayers to enable them to go day by day to their regular place of employment and back to their home are deductible. The Full High Court held that the costs incurred by a taxpayer in travelling to the place where they regularly work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. The principle in Lunney's Case (that the cost of travel between home and work is generally incurred to put you in a position to perform your duties, rather than in the performance of those duties) has been considered in numerous more recent decisions. These decisions confirm that the general principle is not altered by the availability of transport, the lack of suitable public transport, the erratic hours and times of the travel, or the 'on-call' nature of the work. Car expenses in travelling to and from work incurred by a disabled person who could not otherwise travel to work were disallowed as a private or domestic expense which is not deductible, in the Taxation Board of Review decision Case R72, 84 ATC 506. The following commentary was made by the Chairman H. P. Stevens '... whilst one is readily sympathetic ...and full of admiration for the taxpayer's fight against (his) disabilities, it is impossible to forget the fact that the Board is required to follow the words of the statute under consideration. ...'. Whilst the Commissioner acknowledges your willingness to work, and that public transport is not always available when you need it, the Commissioner does not have any discretion to allow deductions for expenses (or any part thereof) you incur to travel between your home and work. It is the words of the statute that must be considered and not whether allowing the deduction is fair and reasonable. The expenses you incur travelling to and from work are not incurred in gaining or producing your assessable income; rather, they are incurred to enable you to earn assessable income. The essential character of the expenses is private in nature, and accordingly not deductible under section 8-1 of the ITAA 1997.