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Edited version of your written advice
Authorisation Number: 1013068485433
Date of advice: 9 August 2016
Ruling
Subject: Work related travel expenses
Question 1
Can you claim a deduction for your travel costs for travelling to and home from various contracted employers?
Answer
No.
This ruling applies for the following period:
Year ending 2016.
The scheme commences on:
1 July 2015.
Relevant facts and circumstances
You work as a contracted nurse for various employers at different locations.
Your contracts are about two to five months in length.
You negotiate the next contract once one contract draws to an end. This may be with another employer at a different location.
You do not usually receive a travel allowance from employers.
You use your own car to travel to places of employment.
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 a loss or outgoing to the extent to which it is incurred in gaining or producing assessable income, except where the loss or outgoing is of a capital, private or domestic nature, or relates to the earning of exempt income.
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 (Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478; 11 ATD 404) (Taxation Ruling IT 112).
In Lunney v. FC of T (1958) 100 CLR 478 (Lunney's Case) the Full High Court laid down the principle that for a deduction to be allowable it is not enough for the expenditure to be an essential prerequisite to the derivation of assessable income. In that case it was held that the costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income.
The principle in Lunney's Case (that the cost of travel between home and work is generally incurred to put you in a position to perform your duties, rather than in the performance of those duties) has been considered in numerous more recent decisions. These decisions confirm that the general principle is not altered by the availability of transport, the lack of suitable public transport, the erratic hours and times of the travel, or the 'on-call' nature of the work.
The cost of travelling 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. Put at its simplest, travel to work is private; travel on work is business.
In your case, you work as a contracted nurse contracting your services to various employers for a set period of time. When your contract ends with one employer, you negotiate a new contract with a new employer. The new location of employment may require you to travel to a different location for the new contract. This travel is putting you in a position to earn assessable income and is not incurred while in the course of earning that income. Therefore, you are not able to claim a deduction for your travel expenses between contracts.
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