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Edited version of your written advice
Authorisation Number: 1012866003067
Date of advice: 27 August 2015
Ruling
Subject: Travel - Home to work - itinerancy
Question 1
Are you entitled to a deduction for travel between your home and place of work when required to travel to work sites outside of your normal workplace?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2015
This scheme commences on:
01 July 2014
Relevant facts and circumstances
You are required to travel to work sites outside of your normal workplace.
You have little notice beforehand.
Your employment contract does not change.
You incurred travel expenses.
The location and times of work are irregular.
You are required to transport your own tools and equipment.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Reasons for decision
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.
A deduction is generally not allowable for the cost of travel between home and work as it is considered to be a private expense. Expenditure incurred in travelling to work is a prerequisite to the earning of assessable income rather than being incurred in the course of producing that income. That is, the duties of an employee do not commence until the arrival at a place of work and will cease upon departure from work. The essential character of the expenditure is of a private or domestic nature, relating to personal and living expenses and therefore not an allowable deduction. (Lunney v FCT (1958) 100 CLR 478).
The fact that the travel may be outside normal working hours, or involves a second or subsequent trip, does not change the above principle.
However, a deduction may be allowed for home to work travel expenses in certain exceptional circumstances, for example:
• The employee's home constitutes a place of employment and travel is between two places of employment,
• The employee's employment is inherently of an itinerant nature, and
• The employee has to transport by vehicle bulky equipment necessary for employment.
The second scenario above may apply to you in that your work may be determined to be of an itinerant nature.
Taxation Ruling TR 95/34 provides guidelines for establishing whether an employee is carrying out itinerant work. These guidelines have been established through the views taken by the Courts, Boards of Review and Administrative Appeals Tribunal in deciding when an employees work is itinerant. 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 employee's 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.
• 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 has to carry bulky equipment from home to different work sites.
The characteristics above 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 situation:
• Travel is considered a fundamental part of the work.
• The degree of uncertainty you experience is sufficient to support your employment as being itinerant (that is, no long-term plan and no regular pattern exists).
• The requirement to carry bulky equipment.
Consequently, you are entitled to claim a deduction for your travel expenses to and from work as you are considered to be an itinerant worker during these periods.
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