Edited version of private ruling

Authorisation Number: 1011524781981

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Ruling

Subject: travel expenses

1. Are you entitled to a deduction for the expenses you incur in travelling between home and the work location allocated to you by the agency?

No.

2. Are you entitled to a deduction for the expenses you incur in travelling directly between two different work locations on the same day?

Yes.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

You are an enrolled nurse and you work with an agency under the following system:

· you do not have a set place of work

· the agency calls you (sometimes with a few hours notice) and allocates your work at various hospitals or aged care facilities all over the city

· in an average week you could work at several different places

· you usually do one shift of eight hours per day at the one work location

· on rare occasions where your shift is four hours you might be directed to another four hour shift at a different place.

The agency is your sole employer.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Summary

Your home to work travel will not be deductible when you work at one work location for the day. The travel is a private expense as you are not considered to be itinerant. However, when you work at one site and travel directly to another site on the same day to work, the travel is considered work related and is deductible.

Detailed reasoning

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.

A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties (see paragraph 77 of Taxation Ruling TR 95/34).

However, there are situations where it has been accepted that travel by employees from home to work is deductible.

These include:

· where the taxpayer has to transport, by vehicle, bulky equipment necessary for employment

· where the taxpayer's employment is inherently of an itinerant nature.

In your situation, we consider that as a nurse you would not be required to transport bulky equipment between home and your place of employment.

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 the taxpayer's work, that is, a taxpayer is required to undertake several journeys between different workplaces per day to be able to perform his/her work (FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335) (Wiener's case).

There is a 'web' of work places in the taxpayer's regular employment. A web of workplaces will exist where the employee performs work at a single site and then moves to other sites on a regular basis as in Wiener'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 Wiener'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 not considered to be itinerant as travel is not an essential feature of your duties as a nurse. When you commence your shift at a hospital you remain at that hospital until the end of your shift.

You are aware you will be working in one location at a hospital or aged care facility as advised by the agency. Occasionally the agency will direct you to work two four hour shifts on the one day. However you do not regularly work at more than one site and there is no web of workplaces which you will visit during one day.

As you are not considered to be itinerant, your home to work travel is a private expense and will not be deductible under section 8-1 of the ITAA 1997.

Employment commencing before or at the time of leaving home - on call

A deduction may be allowed for travel where the employee is considered to be on-call and on-duty from the moment of receiving the call in terms of their duties (Taxation Ruling IT 112).

In FC of T v. Collings 76 ATC 4254: (1976) 6 ATR 476 (Collings' Case) a deduction was allowed due to the special circumstances of the case. In Collings' Case a computer consultant's employment required her to be on call 24 hours a day. She was provided with a portable terminal that was connected to her employer's computer through the telephone line. She would commonly receive phone calls at home and give advice to workers at the office over the phone. If she was unable to resolve the problem over the phone or computer, she would return to the office. It was held that any travel that was solely outside the normal daily journeys to and from work was deductible.

We consider a person to be on call when they are required by their employer to be on call for work related purposes. For example a medical practitioner, who holds an appointment at a hospital and is required by the terms of their appointment to be accessible by telephone to cope with emergency cases and who gives medical instructions over the phone prior to leaving home, is considered to be on call.

In your case, we consider that you are not on call. The agency gives you at least three to four hours notice of your shift. You do not provide advice or give instructions over the phone prior to leaving home. Given these facts your employment is not considered to have commenced at the time of leaving home.

Travel between two workplaces

Taxation Ruling IT 2199 outlines the situation where travelling expenses are deductible between different places of employment.

Paragraph 4 of the Ruling states that travelling between two places of employment should be allowed where the taxpayer does not live at either of the places and the travel has been undertaken for the purpose of enabling the taxpayer to engage in income producing activities.

Taxation Ruling TR 95/15 Income tax: nursing industry employees provides the following example at paragraph 161:

Kirsten, a nursing employee, works at her employer's two clinics. The cost of travel from one clinic to the other is an allowable deduction as the cost is incurred in travelling between two places of employment.

However, a deduction is only allowable for travel expenses incurred when travelling directly between two places of employment. Where a person breaks the trip between places of employment to return home, or travel elsewhere such as a shopping centre, then the travel expenses are not deductible.

In your situation, where you finish a shift at one hospital or aged care facility and travel directly to the second hospital or aged care facility in order to commence another shift allocated by the agency, you will be entitled to claim a deduction for your travel expenses for this portion of your journey. These expenses include any parking fees you incur at the second workplace.

Methods of claiming car expenses

Division 28 of the ITAA 1997 provides taxpayers with a choice of four methods to calculate their allowable car expenses. Information on the four methods is available on the ATO website: www.ato.gov.au and in TaxPack 2010.

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