Edited version of your written advice

Authorisation Number: 1012669792003

Ruling

Subject: Itinerancy

Question

Are you entitled to a deduction for your travel expenses on the basis that your employment is considered itinerant?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2014

Year ended 30 June 2015

The scheme commences on:

1 July 2013

Relevant facts and circumstances

You live in City A.

You are currently working as a casual employee in City B. You have no experience in working in the field of your casual employment.

It is your intention to source further employment prior to leaving your current employment.

You will continue to find further employment opportunities as you travel back to City A.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

You are not entitled to a deduction for your travel expenses as your employment is not considered to be itinerant in nature.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) broadly allows a deduction for any losses or outgoings to the extent to which they are incurred in gaining or producing assessable income except to the extent outgoings are of a capital, private or domestic nature.

A deduction is generally not allowable for the cost of transport between home and the normal workplace. However, a deduction is allowable for the cost of travelling between home and work if an employee's work is itinerant (Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses).

The question of whether an employees 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. 

There have been a number of cases where deductions for transport expenses were allowed on the basis of the taxpayers shifting places of work. Shifting places of work is another term for itinerancy. The following characteristics have emerged from these cases as being indicators of itinerancy: 

• travel is a fundamental part of the employees work

• the existence of a web of work places in the employees regular employment, that is, the employee has no fixed place of work

• 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 or regular pattern exists)

• the employees home constitutes a base of operations

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

• the employer provides an allowance in recognition of the employees need to travel continually between different work sites.

A web of work places exists when an employee earns the income by performing his or her duties at several work sites before returning home. In FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335, the taxpayer was required to teach at four to five schools each day. Her duties for the day involved travelling between the schools to instruct pupils at different schools. This constituted a web of work places because the travel was a fundamental part of her work. Travelling between schools was part of her duties for the day.

This situation is contrasted with Case U97 87 ATC 584; AAT Case 68 (1987) 18 ATR 3491, where the taxpayer was not considered to be an itinerant worker. His work required him to travel to one outer station for a number of days then another outer station for another period. It was decided that there is not the web of work places to be regarded as itinerant.

Paragraph 44 of TR 95/34 states:

Although each case must be considered on an individual basis, the frequency of travel between work sites is an important element. What needs to be determined is whether the length of time spent at a work site qualifies it as a regular or fixed place of employment. This will be a matter of fact.

A distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties 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 this travel is incurred to put you in a position to perform your duties of employment, rather than in the performance of those duties.

In your case, you reside in City A and currently have casual employment in City B. You will work there for a period of months before moving to another location as you head back towards City A. Travel is not a fundamental part of your work and you do not have a web of work places as you will remain in the one location for a significant period of time, establishing a regular place of employment, before moving to your next location.

As each job is considered to be a regular place of employment your employment is not itinerant and the relevant travel expenses are incurred in order to put you in a position to commence your work, rather than in the course of performing your work. Consequently, you are not entitled to a deduction for your travel as it is private in nature.

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