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Edited version of private ruling
Authorisation Number: 1011827234107
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Ruling
Subject: Travel allowance
Question
Is the allowance you received a travel allowance?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2010
Year ending 30 June 2011
The scheme commenced on
1 July 2009
Relevant facts
You were living and working in City A.
Your employer gained a contract in City B and asked you to travel to City B to work on the project.
From a 12 month period you travelled to City B and worked on the project for a number of weeks and returned home to City A for 1 week.
Throughout this period you were not provided with any food or housing by your employer, but were paid an allowance for the nights spent in City B. Your employer referred to the allowance as a living away from home allowance.
Your employer stopped paying you the allowance and asked whether you wished to relocate to City B if you wanted to continue working on the project.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 900-30(3).
Reasons for decision
Subsection 900-30(3) of the Income Tax Assessment Act 1997 states that a travel allowance is an allowance your employer pays you to cover accommodation, food, drink or incidental expenses incurred in undertaking travel in the course of your employment duties.
Miscellaneous Taxation Ruling MT 2030 discusses the difference between travelling on work and living away from home for work. It states that travelling on work occurs where the employee is travelling in the course of carrying out their duties of employment whereas a person is living away from home for work where they have a new work location.
In your case, you were working and living in City B for a number of weeks and returning home to City A for 1 week over a period of 12 months. During this period you received an allowance for living expenses. It is considered that for this period you were living away from home for work rather than travelling on work. That is, during the 12 month period you were living both in City A and City B and you travelled because your work location had been moved to City B for that period. Travel was not a part of your actual work duties. Therefore, the allowance you received is not a travel allowance.
Further information
As you were not travelling in the course of carrying out employment duties, no deduction is available for the accommodation, meals and incidental expenses you incur when working away from your usual place of residence. Further to this the essential character of your expenditure is of a private or domestic nature as it arises due to the choice of where you live and where you work. The expenses incurred by you to stay in close proximity to your work-place are a prerequisite to the earning of assessable income and are not expenses incurred in the course of gaining or producing that income.
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