Edited version of private ruling

Authorisation Number: 1011795072328

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Ruling

Subject: Itinerancy

Question 1

Is your work considered to be itinerant in nature?

Answer

Yes.

Question 2

Are you entitled to a deduction for your home to work travel?

Answer

Yes.

This ruling applies for the following periods:

Year ended 30 June 2011

Year ended 30 June 2012

Year ended 30 June 2013

Year ended 30 June 2014

The scheme commences on:

1 July 2010

Relevant facts and circumstances

You are employed in a managerial role.

You also provide specialist advice regarding the systems used by your employer.

Your employer has a number of main offices.

You are required to visit X of the offices on an ongoing and frequent basis to supervise and oversee staff.

You are required to attend all offices, and additional venues as required, for scheduled meetings with project teams and policy makers.

You work from home approximately X hours per week, to plan each day's start location, address emails, and attend to emergencies, in addition to other normal work activities.

You undertake approximately X% of your work at home.

Work occurs in an office located at your main residence (separate room).

Your planning for each day generally takes place in the early morning. This planning process involves a review of the previous day's activities (emails, meetings, issues and priorities) which will determine the first location to be attended.

You travel each work day between the required offices or other meeting venues to attend appointments as scheduled.

The number of work sites visited varies from day to day but on average would be X per day. You would do this on average three days out of five per week. The other two days could be at any of the offices depending on meeting requirements for that day.

You are responsible for the 24 hour a day, seven day a week availability of the systems used by your employer. These systems manage the dispatch of field crews for emergency, reactive and preventative maintenance.

You are contacted on your mobile phone in the case of an emergency. You then review the situation from home and if necessary travel to the appropriate work site or refer the problem to a technical specialist.

You are supplied by your employer a mobile phone, laptop, and external access to the company network to provide the first point of response should a system failure occur at any time.

The motor vehicle to be used for the travel is to be privately owned.

It is expected that your employer will pay a travel allowance in respect of the use of your vehicle for work related purposes.

Relevant legislative provisions

Income Tax Assessment Act 1997 Division 28 and

Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision

Summary

You are deemed to be an itinerant worker as you satisfy the indicators in Taxation Ruling TR 95/34. You are consequently allowed a deduction for your home to work travel.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for expenses incurred in gaining or producing your assessable income. A deduction is not allowable for expenses that are of a capital, private or domestic nature.

The general principle for income tax purposes is that travel from home to work is private. This has been established by the decision in Lunney and Hayley v. FC of T (1958) 100 CLR 478. While travel to work is a necessary prerequisite to earning income, it is not undertaken in the course of earning that income. Travel to work is considered to be private and travel on work is considered to be business. Receiving a motor vehicle allowance in acknowledgement of motor vehicle expenses does not automatically entitle an employee to a deduction.

There are exceptions to this general principle. These are examined in Taxation Ruling IT 112. One exception in particular is if: 

· the employee has an itinerant form of employment (that is, multiple places of work in any one day) necessitating the use of the motor vehicle to travel to and from home, in order to have the vehicle available for travel while at work (Taylor v. Provan (1975) AC 194 at pages 1213 and 1219; FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335 (Wiener's case).  

Taxation Ruling TR 95/34 explains when an employee is considered an itinerant worker:

18. The question of whether an employee's work is itinerant is one of fact, to be determined according to individual circumstances. It is the nature of each individual's duties and not their occupation or industry that determines if they are engaged in itinerant work.

TR 95/34 provides that the following characteristics have emerged as being indicators of itinerancy:

a) travel is a fundamental part of the employee's work;

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

c) the employee continually travels from one work site to another. An employee must regularly work at more than one work site before returning to his or her usual place of residence;

d) other factors that may indicate itinerancy (to a lesser degree) include:

(i) the employee has a degree of uncertainty of location in his or her employment (that is, no long term plan and no regular pattern exists);

(ii) the employee's home constitutes a base of operations (FC of T v. Collings 76 ATC 4254; Owen v. Pook (1970) AC 244; FC of T v. Ballesty 77 ATC 4181);

(iii) the employee has to carry bulky equipment from home to different work sites (FC of T v. Vogt 75 ATC 4073);

(iv) the employer provides an allowance in recognition of the employee's need to travel continually between different work sites (Commissioner of Taxation v Payne (2001) ALGR 442; (2001) 177 ALR 270; (2001) ATC 4027; (2001) ATR 228; (2001) 202 CLR 93; (2001) HCA 3)

Having regard to the indicators of itinerancy set out in TR 95/34, your work is considered to be of an itinerant nature because:

· travel is a fundamental part of your work as you are required to travel to each site to perform your work

· you have a web of work places, that is, no fixed place of work; you earn your income by performing your duties at different sites

· you continually travel from one work site to another - you typically travel to visit a number of sites before returning home each day

· there is a degree of uncertainty of location where you carry out your duties and no regular pattern as this is dictated by daily needs, and

· your employer believes that travel is a fundamental part of your role and pays you a travel allowance.

You are considered to be carrying out itinerant work and therefore entitled to claim a deduction for expenses incurred when travelling to and from work, as the expenses are incurred in travelling in the course of gaining or producing your assessable income. Consequently, a car expenses deduction is allowable using one of the four methods contained in Division 28 of the ITAA 1997.

Years ruled on

It is noted that you asked for the private ruling to apply from 1 July 2010 to 30 June 2011 and subsequent years. The Commissioner does not rule for indefinite or extended periods as there may be changes to the facts of the arrangement or the law in question. Also, a public ruling may issue which affects the private ruling. Therefore, we have only ruled for the 2009-10 to 2013-14 financial years.

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