ATO Interpretative Decision

ATO ID 2001/35

Income Tax

• This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Whether motor vehicle expenses incurred in travel between home and work by an employee who is on-call are an allowable deduction under Income Tax Assessment Act 1997 section 8-1.

Decision

The taxpayer's travel from home to work is not incurred in gaining or producing assessable income (being private or domestic in nature) and therefore is not an allowable deduction under Income Tax Assessment Act 1997 section 8-1.

Facts

The taxpayer works for emergency services and is called for duty at any time of the day or night. The taxpayer receives remuneration from the time the taxpayer is contacted by telephone. The taxpayer's private vehicle is used to travel from home to the workplace.

Reasons For Decision

Generally, expenditure in travelling between one's private residence and place of work is of a private nature and is accordingly excluded as a deduction under Income Tax Assessment Act 1997 section 8-1. Only in some special circumstances is such travel deductible. These exceptions are summarised in Taxation Ruling IT 2543 (Income tax : transport allowances : deductibility of expenses incurred in travelling between home and work) and include where the taxpayer's employment can be construed as having commenced before or at the time of leaving home.

Taxation Ruling IT 112 (The deductibility of travelling expenses between residence and place of employment or business) states that in the case of a taxpayer whose employment requires him to be on stand-by duty at home, the deductibility of expenditure in travelling from home to a place of work is a question of fact to be decided according to the circumstances of each case. The mere fact that a person is on stand-by duty at home is not enough. Nor is it enough that the person gets paid for the time taken to travel to work after receiving an after hours call out, though this may be relevant. More important is whether the person commences his or her actual duties from the time of the call.

In RC of T v Collings 76 ATC 4254; 7 ATR 476 a deduction was allowed due to the "special circumstances of the case". In Collings case the taxpayer's terms of employment were that, they used their computer terminal at home and if the problem could not be resolved over the telephone, they would return to the office in order to get the computer working. The court distinguished this situation from the situation where employees are on stand-by duty at their homes and are required to obey a summons to cope with some emergency. In the former case the taxpayer has effectively commenced their employment duties before travelling to the workplace.

The taxpayer's duties do not commence from the time the telephone call is received, but from the time of arrival at the workplace. The payment of wages from the time of the telephone call does not alter the nature of the expense. The taxpayer's travel from home to work is not incurred in gaining or producing assessable income (being private or domestic in nature) and therefore is not an allowable deduction under Income Tax Assessment Act 1997 section 8-1 (Case U97 87 ATC 584; Case 68 18 ATR 3491, Case U156 87 ATC 908, FC of T v Genys 87 ATC 4875; 19 ATR 356, Commissioner of Taxation v Payne [2001] HCA 3 also refer)

Legislative References:
Income Tax Assessment Act 1997
   section 8-1

Case References:
Case U97
   87 ATC 584

Related Public Rulings (including Determinations)
IT 2543
IT 112

Keywords
Home to work travel expenses
Motor vehicle expenses
Travel expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  4 June 2001

ISSN: 1445-2782