Private ruling: Work-related travel expenses - itinerant work
Date of advice: 27 July 2017
Published: November 2017
Ruling period: ● Year ended 30 June 2017 | ● Year ending 30 June 2018
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for transport expenses incurred when you travel between home and work? | A1: Yes.

Relevant facts and circumstances: You are casually employed as a personal care assistant. Your employers are X and Y. You do not have an office at either employer. Your employment contract specifies that your workplace is “Z – Various”. You are required to travel to various clients’ residence. Your responsibilities as a personal care assistant include providing services at clients home, and taking clients on outings at their request, such as to doctors' appointments and shopping. You use your own motor vehicle to transport your clients. You are notified fortnightly of the shift and location of the clients’ residence you must attend, although you may occasionally be given a one off shift. Your usual pattern of travel involves attendance at several clients before returning home. In addition to your normal duties at your clients’ residence, you attend the office for staff meeting or training four times a year at the most. Your employers pay you an allowance from the time you leave home until your return.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1. | Income Tax Assessment Act 1997 section 25-100. | Income Tax Assessment Act 1997 section 900-220(3).

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. Travel between home and work 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. A deduction is generally not allowable for the transport expenses incurred by an employee between their home and their normal workplace as it is considered private in nature. The cost of such travel is generally incurred to put the employee in a position to perform their duties of employment, rather than in the performance of those duties However, a deduction may be allowed for home to work transport expenses in certain exceptional circumstances, established in Taxation Ruling TR 95/34 Income Tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses , where: ● the employees home constitutes a place of employment and travel is between two places of employment, ● the employees employment is inherently of an itinerant nature, and ● the employee has to transport by vehicle bulky equipment necessary for employment. In your situation, we accept that as a personal care assistant you would not be required to transport bulky equipment between home and your workplace. TR 95/34 provides guidelines as to when a taxpayer's work is considered to be itinerant. These guidelines have been established through the views taken by the Courts, Boards of Review and the Administrative Appeals Tribunal in deciding when an employee's work is itinerant. The following characteristics have emerged from these cases as being indicators of itinerancy: ● Travel is a fundamental part of taxpayer's work, that is, a taxpayer is required to undertake several journeys between different workplaces per day to be able perform his/her work ( Federal Commissioner of Taxation v. Wiener 78 ATC 4006; (1978) 8 ATR 33) ( Weiner's case ). ● There is a 'web' of work places in the taxpayer's regular employment. A web of work places will exist where the employee performs work at a single site and then moves to other sites on a regular basis as in Weiner's case. However, the existence of a 'web' of work places will not exist if an employee performs work at more than one site and each site is regarded as a regular fixed place of employment. TR 95/34 states that if the teacher in Weiner's case had attended only one school each day instead of many, each school would be regarded as a regular place of employment. ● The employee continually travels from one work site to another. An employee must regularly work at more than one site before returning to his or her usual place of residence. In your situation, you are considered to be itinerant as: ● Travel is a fundamental part of your duties as a home personal care assistant; you are required to undertake several journeys between different workplaces to be able to perform your duties. ● The various clients you are required to attend within your given area are a web of work places which you visit during one day. You are considered to be commencing your duties from the moment you leave home. ● There is usually continual travel from one client to another. ● Your shifts have a degree of uncertainty; and ● Allowances are paid by your two employers in recognition of the need to travel. As you are considered to be itinerant, your home to work is a work-related expense and will be deductible under section 8-1 of the ITAA 1997. | Detailed Reasoning - Further issues for you to consider: As with other work related expenses, transport expenses incurred to travel between home and work are subject to the substantiation rules of Division 900 of the ITAA 1997. Travel from client's residence to other locations Motor vehicle expenses incurred in the course of deriving assessable income is an allowable deduction under Section 8-1 of the ITAA 1997. When you transport clients to other locations, such as doctors' appointments or shopping, you incur the expense while you are in the course of deriving your income. You are entitled to a deduction for the transport expenses you incur when you transport clients to various locations. Travel between two workplaces Section 25-100 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for expenditure to the extent that it is incurred when travelling between workplaces. Section 25-100 of the ITAA 1997 states: 'If you are an individual you can deduct a transport expense to the extent that it is incurred in your travel between workplaces.' Section 900-220(3) defines a 'transport expense' as a loss or outgoing to do with transport, including the decline in value of a depreciating asset used in connection with transport.