Edited version of private ruling

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Ruling

Subject: Work related expenses - travel

Are you entitled to a deduction for the cost of travel between your home and your place of employment?

No.

This ruling applies for the following periods:

Year ended 30 June 2009

Year ended 30 June 2010

The scheme commences on:

1 July 2008

Relevant facts and circumstances

You work for a company.

The vehicles you work on do not have a permanent base, so you travel to several different locations where the vehicles are stored.

You are made aware where the vehicles will be when you get your orders to start your shift.

During a shift, the vehicles can move from location to location depending on which location has space for them to be stored, so you might start your first day driving to one location and then find the next day you will be driving to a different location to do your shift.

Sometimes you end the day at a different location to where you started. If this happens, either a ute takes you back to your car, or the company gets you a taxi.

You carry work gear (various tools) which weighs a couple of kilos with you from home to work.

There is no secure place to store the tools at work, but you think locked storage could be arranged if necessary.

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.

Travel between home and work

Taxation Ruling TR 95/34 discusses the deductibility of travel expenses and provides that a deduction is generally not allowable for the cost of travel by an employee between home and their normal work place, 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, rather than in the performance of those duties (paragraph 77 of TR 95/34).

However, TR 95/34 provides that the cost of travel between home and work may be allowable in certain situations such as where:

· the employee's home constitutes a base of employment and travel is between two places of employment

· the employee has to transport by vehicle bulky equipment necessary for employment

· the employee's work is inherently of an itinerant nature.

Itinerant work

Paragraph 7 of Taxation Ruling TR 95/34 contains a list of characteristics which indicate when an employee's work is itinerant. These are:

· travel is a fundamental part of the employee's work

· the existence of a web of work places in the employee's regular employment, that is, the employee has no fixed place of work

· the employee continually travels from one work site to another. An employee must regularly work at more than one work site before returning to their usual place of residence, and

· other factors that may indicate itinerancy (to a lesser extent), including that the employee has a degree of uncertainty of location in their employment, the employee's home constitutes a base of operations, and the employee is required to carry bulky equipment from home to different work sites.

It should be noted that the above characteristics are not exhaustive and no single factor on its own is necessarily decisive.

Travel is a fundamental part of an employee's work

For the travel to be a fundamental part of an employee's work, it must be an essential feature of an employee's duties. In Taylor v. Provan [1975] AC 194, Lord Simon stated:

the obligation to incur the expenses of travelling in question must arise out of the nature of the office or employment itself, and not out of the circumstances of the particular person appointed to the office or employed under contract of employment.

You travel to one of several locations to begin your work on the vehicles. Your duties will generally only be expected to commence when you reach the location where you start your shift. The cost of travelling between home and work is to put you in a position to perform your duties, rather than in the performance of your duties. Therefore, travel in your own personal vehicle is not a fundamental part of your employment.

Web of work places

A web of work places exists if a taxpayer performs work at a single site and then moves to other sites on a regular basis. In FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335 (Wiener's Case), the taxpayer was required to attend several to five schools each day, which constituted a web of work places.

Taxation Ruling TR 95/34 states that although an employee may perform duties at more than one work location, this fact in itself may be insufficient to constitute a 'web' of work places for the purpose of itinerancy. Each work place may be regarded as a regular or fixed place of employment. For example, if the teacher in Wiener's case had attended only one school each day, each school would be regarded as a regular place of employment.

In your case, there are several different start locations that you may attend to perform your duties. As the vehicles may be based at any of these locations, you have no fixed place of employment. However, although your start location changes from day to day, you generally only attend only one work site each day. You do not travel regularly from workplace to workplace using your own vehicle.

Therefore, your employment does not constitute a web of work places.

Continual travel from one work site to another

Continual travel involves an employee regularly working at more than one work site in a day before returning home.

While you may perform your duties at more than one work location in a work day, you are not required to travel continually from one location to another after the commencement of your duties.

Continuous travel between work sites is not considered a part of your employment duties.

Uncertainty of location

A factor that may indicate itinerancy (to a lesser degree) is if the employee has a degree of uncertainty of location in his or her employment. Unlike an ordinary worker who makes the daily journey to his or her regular place of work, the itinerant worker often cannot be certain of the location of their work sites.

The concept of uncertainty was highlighted in Case T106 86 ATC 1192; AAT Case 17 (1987) 18 ATR 3093, where the taxpayer was often uncertain about the work site he would be required to attend until the actual day of work. Senior Member Roach said:

He does not work according to any regular pattern as to work site; there is no long-term plan by which he can predict what will be required of him in the future; and there is no certainty as to the range of work sites he may be called on to attend over a period. In my view his occupation is that of an itinerant worker.

In your case, you may be required to work at any of the several locations on any given day. Therefore, there is a degree of uncertainty of location in your employment. However, this degree of uncertainty surrounding your employment is not enough to indicate itinerancy in the absence of other factors.

Transport of bulky equipment

A deduction may be allowable for home to work travel if the transport costs can be attributed to the transportation of heavy, bulky or cumbersome equipment, rather than to private travel between home and work.

In your case, you carry work gear weighing a couple of kilograms. The equipment that you transport is not sufficiently cumbersome or heavy to be considered bulky.

Conclusion

In view of the above, your employment is not considered itinerant in nature. The expenses you incurred are considered private and are incurred to put you in a position to perform the duties of your employment, rather than in the performance of those duties. Therefore, you are not entitled to a deduction for your travel expenses between home and work, under section 8-1 of the ITAA 1997.

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