Edited version of your written advice

Authorisation Number: 1013134182416

Date of advice: 30 November 2016

Ruling

Subject: Work related expenses

Question 1

Are you entitled to a deduction for transport expenses incurred when you travel from home to work?

Answer

No.

Question 2

Are you entitled to a deduction for transport expenses incurred when you take clients from their residence to other locations?

Answer

Yes.

Question 3

Are you entitled to a deduction for transport expenses incurred when you travel directly between two different workplaces on the same day?

Answer

Yes

This ruling applies for the following period

Year ending 30 June 2017

The scheme commences on

1 July 2016

Relevant facts and circumstances

You are casually employed as a carer.

You are required to travel to your client's residence, which can be up to 50kms from your home.

Your responsibilities as a carer include taking clients on outings at their request, such as to doctors' appointments and shopping. You use your own motor vehicle to transport your clients.

You are notified at least the day prior to the shift and location of the client's residence, but occasionally given only hours' notice.

You occasionally are required to go from one client's residence to another in the same shift.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Income Tax Assessment Act 1997 Section 25-100

Income Tax Assessment Act 1997 Section 900-220(3)

Further issues for you to consider

As with other work related expenses, transport expenses incurred to travel between workplaces are subject to the substantiation rules of Division 900 of the ITAA 1997.

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, or relate to the earning of exempt income.

Home to work travel

In considering the deductibility of travel expenses, 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 that the taxpayer's expenses can be deducted.

A deduction is generally not allowable for the transport expenses incurred by an employee between their home and their normal workplace as it is considered private in nature. The cost of such travel is generally incurred to put the employee in a position to perform their duties of employment, rather than in the performance of those duties

However, a deduction may be allowed for home to work transport expenses in certain exceptional circumstances, established in Taxation Ruling 95/34, where:

● the employees home constitutes a place of employment and travel is between two places of employment,

● the employees employment is inherently of an itinerant nature, and

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

In your situation, we accept that as a carer you would not be required to transport bulky equipment between home and your workplace.

TR 95/34 provides guidelines as to when a taxpayer's work is considered to be itinerant. These guidelines have been established through the views taken by the Courts, Boards of Review and the Administrative Appeals Tribunal in deciding when an employee's work is itinerant. The following characteristics have emerged from these cases as being indicators of itinerancy:

● Travel is a fundamental part of taxpayer's work, that is, a taxpayer is required to undertake several journeys between different workplaces per day to be able perform his/her work (Federal Commissioner of Taxation v. Wiener 78 ATC 4006; (1978) 8 ATR 33) ( Weiner's case).

● There is a 'web' of work places in the taxpayer's regular employment. A web of work places will exist where the employee performs work at a single site and then moves to other sites on a regular basis as in Weiner's case. However, the existence of a 'web' of work places will not exist if an employee performs work at more than one site and each site is regarded as a regular fixed place of employment. TR 95/34 states that if the teacher in Weiner's case had attended only one school each day instead of many, each school would be regarded as a regular place of employment.

● The employee continually travels from one work site to another. An employee must regularly work at more than one site before returning to his or her usual place of residence.

In your situation, you are not considered to be itinerant as:

● Travel is not an essential feature of your duties as a carer; you are not required to undertake several journeys between different workplaces to be able to perform your duties. You are not considered to be commencing your duties from the moment you leave home. Your travels to various locations with your clients are not considered to be journeys between workplaces.

● You are aware you will be working in one location at a residence or aged care facility as advised by your employer. Occasionally you will be directed to work another shift in a different location on the same day. However you do not regularly work at more than one site and there is no web of workplaces which you will visit during one day.

As you are not considered to be itinerant, your home to work is a private expense and will not be deductible under section 8-1 of the ITAA 1997.

Travel from client's residence to other locations

Motor vehicle expenses incurred in the course of deriving assessable income is an allowable deduction under Section 8-1 of the ITAA 1997.

When you transport clients to other locations, such as doctors' appointments or shopping, you incur the expense while you are in the course of deriving your income. You are entitled to a deduction for the transport expenses you incur when you transport clients to various locations.

Travel between two workplaces

Section 25-100 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for expenditure to the extent that it is incurred when travelling between workplaces.

Section 25-100 of the ITAA 1997 states: 'If you are an individual you can deduct a transport expense to the extent that it is incurred in your travel between workplaces.'

Section 900-220(3) defines a 'transport expense' as a loss or outgoing to do with transport, including the decline in value of a depreciating asset used in connection with transport.

You are required to drive your own vehicle from one client's residence to another. You are entitled to a deduction for the transport expenses you incur when you travel between the various workplaces.

Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).