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Ruling

Subject: Work related travel

Questions and answers:

Are you considered an itinerant worker?

No.

Are you entitled to claim travel costs you incur from home to work and between places of work?

No.

This ruling applies for the following period:

Year ended 30 June 2012

Year ended 30 June 2013

The scheme commenced on:

1 July 2011

Relevant facts:

You are employed as a customer service attendant.

You are employed at several different locations .

You do not have a set place of work.

Your duties are varied.

In any given week you can be at a different locations for each working day,

Whilst in other weeks you may be at the one location for a whole week.

No allowance is paid by the employer for travel costs.

You are provided with free transport to and from work on most days.

Sometimes your shifts finishes such that you do not receive free transport and on these occasions you must drive to and from work.

Relevant legislative provisions:

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 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.

Itinerant workers

Itinerant worker is not defined and as such reference is made to the courts. Determining whether expenses are deductible on the basis of the obligation to incur transport expenses arising because of the nature of the work such as where the worker has a "shifting place of work", is a question of fact.

The following characteristics have emerged from cases as being indicators of itinerancy:

· 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; and or

· 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.

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

· 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),

· the employee's home constitutes a base of operations,

· the employee has to carry bulky equipment from home to different work sites, and or

· the employer provides an allowance in recognition of the employee's need to travel continually between different work sites.

Whilst the above characteristics are not exhaustive, they provide guidelines for determining whether an employee's work is itinerant. It is considered that no single factor on its own is necessarily decisive.

In your case, your home does not constitute a base of operations, you do not carry bulky equipment nor do you receive an allowance from your employer. You also have not been able to establish a "web of work places" as once you commence work for the day you stay at the same location for that shift or day.

When available, you do receive free travel as part of your employment. While you also have a degree of uncertainty of location and work patterns, travel is not a fundamental part of your employment.

You do not demonstrate the characteristics of an itinerant worker.

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 situations include:

· where the taxpayer's home constitutes a place of employment and travel is between two places of employment or business,

· where the employment can be construed as having commenced at the time of leaving home (for example a doctor on call), and

· the transportation of bulky equipment in some circumstances.

Employment commencing before or at the time of leaving home

Taxation Ruling IT 112 states that a deduction may be allowed for travel expenses where the employee is considered to be on-call and on-duty from the moment of receiving the call.

In Federal Commissioner of Taxation v. Collings 76 ATC 4254; 6 ATR 476, the taxpayer was on-call 24 hours a day and at times was required to attend her workplace after hours. It was held that any travel that was solely outside the normal daily journeys to and from work was deductible.

In your case, you are required to be on call but not on a 24 hour a day basis. You do not carry out any work functions before leave home and you have not commenced work at the time of leaving home.

Conclusion

The expenses you incurred to travel between your home and work and between work places are not incurred in gaining or producing assessable income. Accordingly, you are not entitled to claim work related travel expenses.

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