Edited version of private ruling

Authorisation Number: 1011816338465

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Ruling

Subject: Work related expenses - motor vehicle

Question 1

Are you entitled to a deduction for your motor vehicle expenses in travelling to and from work?

Answer: No.

Question 2

Are you entitled to a deduction for your motor vehicle expenses in travelling directly between two different workplaces on the same day?

Answer: Yes.

This ruling applies for the following periods:

Year ending 30 June 2011

Year ending 30 June 2012

The scheme commences on:

1 July 2010

Relevant facts and circumstances

You are an employee working for an agency.

You work day and night shifts but mainly night shifts.

The agency calls you and allocates your work at various places. You are notified of available shifts the day prior but on occasions you can be given only hours notice.

You travel from home to your work place by car.

You are sometimes required to work two shifts in 24 hours in different locations.

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 expenses as you are not considered to be itinerant. However, when you work and travel directly to another site on the same day to work, the travel between the two work sites 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 or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature.

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.

· where the taxpayer is considered to be on-call and on-duty when commencing work from home.

In your situation, we accept that 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 taxpayer's work, that is, a taxpayer is required to undertake several journeys between different workplaces per day to be able perform his/her work (Federal Commissioner of Taxation v. Wiener 78 ATC 4006; (1978) 8 ATR 33) ( Weiner's case).

· There is a 'web' of work places in the taxpayer's regular employment. A web of work places will exist where the employee performs work at a single site and then moves to other sites on a regular basis as in Weiner'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 Weiner'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 you remain at that place until the end of your shift.

· You are aware you will be working in one location as advised by the agency. Occasionally the agency will direct you to work another shift on the same 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 is a private expenses 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 Federal Commissioner of Taxation v. Collings (1976) 10 ALR 475; 6 ATR 476; 76 ATC 4254 (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 work and from home was deductible.

We consider a person to be on call when they are required by their employer to be on call 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 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 a reasonable notice of time for your shifts. 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 IT 2199 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 workplace and travel directly to the second workplace 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.

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