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Authorisation Number: 1051299135093
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Date of advice: 26 October 2017
Ruling
Subject: Home to work travel expenses
Question 1
Your travel to the remotely located mine site is considered travel from home to work and as you are not considered an itinerant worker the travel is not deductible under section 8-1 of the Income Tax Assessment Act 1997.
Answer
No
This ruling applies for the following period:
Year ended 30 June 2015
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You are an Australian resident for taxation purposes.
You were employed as a project based consultant for an initial term.
That term was extended due to additional requirements of the project.
Your client was situated in a remotely located mine site.
You undertook work at your home office and travelled to the site regularly to undertake meetings with your client.
You drove your vehicle to the airport, paid tolls and parking fees and then travelled by air to the mine site on chartered flights.
You were paid a travel allowance under the terms of your contract in recognition of the required air travel.
Relevant legislative provisions
Section 8-1 of the Income Tax Assessment Act 1997
Reasons for decision
Your travel to the remotely located mine site is considered travel from home to work and as you are not considered an itinerant worker the travel is not deductible under section 8-1 of the Income Tax Assessment Act 1997.
Section 8-1 of the Income Tax Assessment Act 1997 deals with general deductions and allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature.
Generally a deduction is not allowable for the cost of travel between home and work as it is considered a private expense. However, a deduction may be allowable for the cost of travel between home and work for an employee who is engaged in itinerant work. 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 the Administrative Appeals Tribunal. The following characteristics have emerged from these cases as being indicators of itinerancy:
a) travel is a fundamental part of the employee's work;
b) the existence of a 'web' of work places in the employee's regular employment, that is, the employee has no fixed place of work;
c) 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;
d) other factors that may indicate itinerancy (to a lesser degree) include:
(i) 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);
(ii) the employee's home constitutes a base of operations;
(iii) the employee has to carry bulky equipment from home to different work sites;
(iv) the employer provides an allowance in recognition of the employee's need to travel continually between different work sites.
In your case, you are only required to travel to one work place and there is no uncertainty about the location of that work place. As such it is determined that you were not engaged in itinerant work and the travel undertaken by you between your home and your clients' location was normal travel to and from work. Therefore as the cost of this travel is private in nature, you are not entitled to a deduction under section 8-1 of the ITAA 1997.
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