ATO Interpretative Decision

ATO ID 2001/80 (Withdrawn)

Income Tax

Travel expenses: Home To Work Flights (Mine Site)
FOI status: may be released
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Whether a fly-in fly-out mine-site employee is entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 for the part of home to work travel which is not paid for by the employer.

Decision

In this case the taxpayer is travelling to work and the expenditure incurred is not an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997.

Facts

The taxpayer is employed at a remote Australian mine-site and works on a two week on, one week off, fly-in fly-out basis. The employer pays for the travel between the mine-site and the capital city of the State in which the taxpayer lives. The employer does not pay for travel between that capital city and the taxpayer's home, which is a considerable distance away.

Reasons For Decision

Section 8-1 of the Income Tax Assessment Act 1997 generally allows a deduction for any loss or outgoing to the extent that it is incurred in gaining or producing assessable income.

It is settled law that expenses of travelling to work are not deductible as they are not incurred in gaining the assessable income, but as a pre-requisite to gaining assessable income (Lunney v FC of T ; Hayley v FC of T (1958) 100 CLR 478).

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 (Taylor v Provan 1975 AC 194).

In this case the taxpayer is travelling to work and the expenditure incurred is not an allowable deduction under section 8-1 of the Income Tax Assessment Act 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.

Date of decision:  31 July 1998

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

Case References:
Lunney v FC of T; Hayley v FC of T
   (1958) 100 CLR 478

Taylor v Provan
   1975 AC 194

Keywords
Deductions and expenses
Home to work travel expenses
Travel expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  15 June 2001

ISSN: 1445-2782

history
  Date: Version:
  31 July 1998 Original statement
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