Private ruling: travel, accommodation and meal expenses
Published: February 2012
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for flights, accommodation and meal expenses incurred when you travel to attend work in another town? | A1: No.

Relevant facts and circumstances: You are employed as a medical doctor. You predominantly work in private practice in your home town. For a short period every month, you practice in a clinic in another town to assist in providing care for those who have limited access to medical services. You travel to this town and stay in paid accommodation each time you visit. You also incur expenditure for meals while away from home. You will be in this town purely for work and not for personal purposes.

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

Reasons for decision: Summary: The costs you incur for accommodation, meals and flights while working in another town are of a private nature and are incurred as a consequence of having your home in one place and working in another. Therefore, they are not incurred in gaining or producing your assessable income and are not deductible. | Detailed Reasoning - Detailed reasoning: Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature. The cost of trips between home and work may be deductible if you are regarded as an itinerant worker. Taxation Ruling TR 95/34 deals with itinerant workers and provides that an employee's work may be considered itinerant if travel is a fundamental part of the employee's work or if a 'web' of work places exist in the employee's regular employment. An employee may also be considered itinerant if the employee continually travels from one work site to another, and regularly works at more than one work site before returning to his or her usual place of residence. None of the above characteristics correspond to your circumstances. Although you have two places of employment, this does not constitute a 'web' of work places, since your occupation is regarded as being at regular and fixed places of employment. Also, continual travel between work sites prior to returning home each day is not an aspect of your employment. In your case you incur costs in travelling to and from another town every month. These costs enable you to get to a point where your assessable income can be earned. That is to say, the travel is to work, rather than on work. As such, your travel expenses are not incurred in gaining or producing assessable income. You are therefore not entitled to claim a deduction for the costs of flights to and from your alternative work location. Accommodation and meals Generally, accommodation and meal expenses incurred by an employee who lives away from home to carry out the duties of their 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. This is supported by the decision in Federal Commissioner of Taxation v. Toms 89 ATC 4373; (1989) 20 ATR 466, where the Federal Court held that expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location were not an allowable deduction as they were considered to be private expenses. Accordingly, your accommodation and meal expenses are of a private and domestic nature, and incurred to enable you to work in another town. They are not incurred during the actual performance of your work. Therefore you are not entitled to a deduction for meal and accommodation expenses under section 8-1 of ITAA 1997.

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.