Edited version of your written advice

Authorisation Number: 1012747005910

Ruling

Subject: Home to work travel

Question 1

Are you entitled to a deduction for the travel between your home and the various locations where you perform your teaching duties?

Answer

No

Question 2

Are you entitled to a deduction for the travel between the various locations where you perform your teaching duties?

Answer

Yes

This ruling applies for the following period

Income year ended 30 June 2014

The scheme commences on

1 July 2013

Relevant facts and circumstances

You are employed by an educational institution.

Your role involves teaching and supervising students at numerous different locations including the campuses of the educational institution and hospitals where your students complete clinical placements.

You drive your own vehicle to all work sites.

You utilise a wheeled suitcase to carry numerous and heavy text books and other teaching tools.

You have responsibility for xx students who work in various hospitals and health service providers in the course of their studies.

You have responsibility to facilitate and supervise learning clinical placements and assessment of learning including exam marking, moderation and supervision. This involves whole cohort lectures, small group teaching, two day intensives and clinical supervision.

You maintain casual employment in order to maintain your qualifications.

You are provided a hot desk at two of the campuses; however you share these hot desks with other staff who teach in different fields.

No place is provided at any of the worksites for you to store teaching materials.

As you do not have an allocated workspace beyond the hot desks you work mainly from your home office when not teaching your students face to face.

One of the work sites is xx km from your home address, xx km from another work site and xx km from another of the work sites.

Your teaching material include text books which vary from x cm - x cm thick and size of xx cm x xx cm, a laptop and other course content.

The total weight of the teaching material carried each day is a minimum of xx kilograms.

The nature of the teaching model you use requires the above material each day.

You are required to transport these teaching materials between home and the various sites for both teaching and preparation.

Due to the rostered nature of your students' placements you are not afforded long term certainty as to where you will be working on each particular day.

On occasion you are required to travel between two of the different work sites in the one day.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Home to work travel

Section 8-1 of the 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.

Generally, the expenses of travel between work and home are not deductible (Lunney & Haley v. FC of T (1958) 100 CLR 478; (1958) 11 ATD 404).

Taxation Ruling TR 95/34 discusses the deductibility of travel expenses. The ruling states that a deduction is generally not allowable for the cost of travel by an employee between home and their normal work place, as it is considered to be a private expense. In this sense, the cost of travel between home and work is incurred to put the employee in a position to perform duties, rather than in the performance of those duties (paragraph 77 of TR 95/34).

However, TR 95/34 provides that the cost of travel between home and work may be allowable in certain situations such as where:

• the employee's work is inherently of an itinerant nature

• the employee has to transport by vehicle bulky equipment necessary for employment

• the employee's home constitutes a base of operations and the travel is to complete work started at home.

Bulky Tools

In the case of bulky equipment, the cost is attributed to the transportation of the bulky equipment rather than private travel between home and work where the transportation of the equipment is essential and is not done as a matter of personal choice or convenience and there is no secure storage provided at the workplace.

In FCT v. Vogt 75 ATC 4073, 5 ATR 274, a professional musician was allowed deductions for motor vehicle expenses incurred by him in travelling between his place of residence and the various places at which he performed. The taxpayer in this case earned his income by performing at several places, on musical instruments and associated equipment on terms that he brought the instruments and equipment to the place of performance; the instruments and equipment were of substantial value; they were of a bulk which meant they could be transported conveniently only by the use of a motor vehicle; the taxpayer kept the instruments and equipment at his residence for justifiable reasons of convenience and for the purposes of practising on them. The Court held that the essential character of the expenditure was such that it should be regarded as having been "incurred in gaining or producing the assessable income".

The Administrative Appeals Tribunal in Crestani v. FC of T 98 ATC 2219; 40 ATR 1037 found the taxpayer's toolbox was bulky and cumbersome. In this case the taxpayer was an aircraft engineer who worked at Sydney Airport. They transported their toolbox home at the end of each shift as there was no secure storage at work and the tribunal held that the home to work travel was attributed to the transportation of these tools. They found that the toolbox '…is not easy to lift, and could not…conveniently be carried for any distance'. The expenses incurred in transporting these tools were deductible and the taxpayer was simply one of those fortunate few who is able to hitch a free ride on his tool box.

In your case, the laptop computer, textbooks and other course content are not considered to be of such bulk that it would change the primary purpose or character of your journey from one of transporting yourself to and from work to one of transporting equipment. While we acknowledge that you do not have a permanent office to store your teaching materials; however, this fact alone is not sufficient to support the contention that that the travel has the essential character of performing your duties as opposed to placing you in a position to perform your duties.

Home as a base of operations

Paragraph 56 of TR 95/34 states that an employee's home may constitute a base of operations if the work is commenced at or before the time of leaving home to travel to work and the responsibility for completing it is not discharged until the taxpayer attends at the work site.  Whether an employee's home constitutes a base of operations depends on the nature and the extent of the activities undertaken by the employee at home. 

In Collings v. Federal Commissioner of Taxation 76 ATC 4254 a highly trained computer consultant was required by her employer to be on call 24 hours a day. The taxpayer was allowed a deduction for car expenses incurred by her in travelling between home and work solely outside the normal daily journeys to and from work. In order to assist in diagnosing and correcting computer faults while at home, she was provided by her employer with a portable terminal.

In accordance with the terms of her employment, she used the terminal at home in the performance of her duties. If she could not resolve the problem over the telephone, she would return to the office in order to get the computer working. In these particular circumstances, the expenses were found to be incurred in gaining or producing her assessable income and were not of a private or domestic nature. The abnormal journeys to and from home were made necessary by the very nature of the employment and of her duties.

Your situation is distinguishable in that you do not commence a work activity at your residence and then complete that particular activity at another work site. Rather on a regular scheduled basis you attend different work sites in X. Consequently due to the regular scheduled nature of the travel it would be considered that these trips form part of your regular travel to work to put you in a position to perform your duties. In support of this position is the absence of any travel allowance or partial reimbursement of the travel expenses by your employer.

Itinerant work

The question of whether an employee's 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.

The following characteristics are outlined in TR 95/34, 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

• 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 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

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

None of the above factors will be determinative in their own right. A question of whether an employee's work is itinerant is one of fact, to be determined according to individual circumstances.

In FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335 ( Wiener's case) a teacher was required to teach at a minimum of four different schools ('web' of work places) each day, and comply with a strict timetable that kept her on the move throughout each of these days. Smith J, in the Supreme Court of Western Australia, concluded that travel was inherent in her employment because the nature of the job itself made travel in the performance of her duties essential, and said (ATC at 4010; ATR at 339):

'...that travel was a fundamental part of the taxpayer's work, is not open to challenge. Viewed objectively, it does not seem to me to be open to question that the taxpayer would not have been able to perform her duties without the use of her motor vehicle. ...it was a necessary element of the employment that on those working days transport be available at whichever school the taxpayer commenced her teaching duties and that transport remained at her disposal throughout each of those days.'

The decision of Wiener was discusses in Case U97 87 ATC 584; AAT Case 68 (1987) 18 ATR 3491 a case involving a fireman who work from various stations. The case compared the travel between the fireman and the teacher in Wiener and stated at 3494, 3495 in reference to traveling between the different sites after starting her employment on each day:

'...this was regarded by the court as an essential feature of her employment. Had she not been required to attend at more than one school on any one day, it would seem that the court may well have taken a different view of the expenses claimed. The position of the taxpayer in that situation where "the office or employment is of itself inherently an itinerant one and that the taxpayer may be said to be travelling in the performance of her duties from the moment of leaving home to the moment of return there" may be contrasted with the position of the applicant in the present case. Once having arrived at his outer station, he remained there until the end of his shift before returning home. ...There was no evidence that his duties required him to use his car from an outer station as a base during the course of his shift. The nature of his employment while there certainly could not be said to be itinerant.'

At paragraph 31 of TR 95/34 the Commissioner provides his view that although a employee may perform duties at a 'web' of work places for the purpose of itinerancy, each work place may be regarded as a regular or fixed place of employment. If the teacher in Wieners case had attended only one school each day, each school would be regarded as a regular place of employment.

In relation to your circumstances we note the following:

• We do not consider that the travel has become a fundament part of your employment, this is evidenced by the fact you are not provided an allowance from your employer in relation to this travel.

• Your facts give the general impression that although you have a number of different locations you regularly teach from, you predominantly teach from a single location on each day and these locations are consequently regular employment locations.

• While you may not be granted the long term certainty that a more traditional lecture timetable would provide, we consider that the rostered nature of the placements would provide your certainty as to where you were working on each day.

• As explained below we do not consider that the teaching material contained in a wheeled suitcase are of sufficient weight or bulk to support the fact that your employment is itinerant.

• Although you are not provide a fixed workplace there are hot desks provided at two of the campuses; this gives the impression that you work from your home office as a matter of personal convenience.

While certain aspects of your situation support itinerancy, we consider on balance that your employment is not itinerant in nature. We consider that the travel retains its fundamental private nature in that it is travel to put you in a position to perform your duties as opposed to being part of your employment duties and will consequently not be deductible under section 8-1 of the ITAA 1997. As discussed above none of the other home to work travel exceptions apply, however any travel between the work locations (excluding your home office) will be deductible.

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