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Edited version of your private ruling
Authorisation Number: 1012467404071
Ruling
Subject: Work-related expenses - Travel
Question 1
Are you entitled to deduct the cost of flights between your home and YY?
Answer
No
This ruling applies for the following periods
Year ended 30 June 2013
The scheme commenced on
1 July 2012
Relevant facts and circumstances
You live in XX.
You work in YY.
You pay the cost of return flights from XX to YY.
Your employer pays the cost of return flights from YY to ZZ.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
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, or relate to the earning of exempt income.
In considering the deductibility of travel expenses a distinction is made between travel to work and travel for work. It is only if the duties of the job require a taxpayer to travel that the taxpayer's expenses can be deducted (Taylor v. Provan [1975] AC 194).
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). The mode of transport, availability of transport, lack of suitable public transport, distance travelled, frequency of travel, and necessity of travel all are factors which do not alter the essential character of travel between home and work as private in nature.
However there are situations where it has been accepted that travel by employees from home to work is deductible. Taxation Ruling IT 2543 summarises these situations as follows:
· your home constitutes a place of employment, and travel is between two places of employment or business
· your employment can be construed as having commenced before or at the time of leaving home
· you have to transport bulky equipment necessary for employment
· your employment is inherently of an itinerant nature
· you are required to break your normal journey to perform employment duties (other than including incidental duties such as collecting newspapers, mail, etc) on the way from home to your usual place of employment, or from the place of your employment to home.
In your case:
· Your home is not a place of employment.
· Your employment does not commence at the time of you leaving home.
· You have not provided any information that you are transporting bulky equipment to your employment.
· Your employment is not of an itinerant nature, that is, your work location is fixed in ZZ.
· You do not break your journey for work purposes when travelling to and from your employment.
Therefore as you are travelling to work rather travelling for work and you do not meet any of the situations as outlined in IT 2543, the expenditure you incur travelling from the XX to YY and the subsequent return journey, is not an allowable deduction under section 8-1 of the ITAA 1997.
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