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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051336951413

Date of advice: 14 February 2018

Ruling

Subject: Work-related travel expenses

Question 1

Are you entitled to claim expenses incurred in travelling from home to your workplace?

Answer:

No.

Question 2

Are you entitled to claim expenses incurred in travelling from one workplace to another workplace?

Answer:

Yes.

Question 3

Are you entitled to claim expenses incurred in travelling from your workplace to your home?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2017

The scheme commenced on

1 July 2016

Relevant facts and circumstances

You are an office manager at a workplace that has two separate locations.

You have offices at both locations and attend each location every day at varying times. There is no written contract; you have a verbal agreement to travel between the two locations.

You do not receive a specific travel allowance; it is built into your gross payments.

Your employer does not reimburse you for any of these costs.

You are advised which location you will be attending and when verbally and can be at short notice.

You travel on a tolled road from your residential address to one location each day and you are required to then travel to the other location.

You carry your laptop, satchel and files with you to your home and to the other location.

You carry out bookkeeping duties for the offices, including accounts payable and receivable.

You transport your laptop between locations and home and also files and invoices, diaries etc due to the difficulty in working during office hours. It is easier for you to complete your work uninterrupted at home.

You would be unable to transport these items on public transport.

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.

Travel between workplaces

A deduction is available for transport expenses incurred by an individual in travel between:

Travel between two places is not ‘travel between workplaces’ if one of the places is the person's residence. Likewise, travel between two places is not travel between workplaces if at the time of travelling to the second place if it is no longer a place at which income is derived.

You attend the two locations of your workplace each day and at both locations you are earning assessable income.

You are entitled to a deduction for travel between the two surgeries under section 8-1 of the ITAA 1997.

Travel between home and the work place - transporting bulky equipment

A deduction is generally not allowable for the cost of travel between home and work as it puts you in a position to commence performing your duties of employment, rather than in the performance of those duties. That is, the duties of an employee do not start 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).

Taxation Ruling TR 98/6 Income tax: real estate industry employees - allowances, reimbursements and work-related deductions is concerned with real estate agents, however we can look to this ruling for guidance.

The ruling explains that a deduction for travel between home and the normal work place is allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work (see FC of T v. Vogt 75 ATC 4073; (1975) 5 ATR 274). It explains further that if the equipment is transported to and from work by the employee as a matter of convenience, the transport costs are private and a deduction is not allowable.

Paragraph 148 of TR 98/6 provides the following example:

You have indicated that you take your work home due to difficulty working during normal office hours and it is easier to complete your work uninterrupted at home.

While we appreciate that you find it more convenient to carry out some of your duties in the privacy and quiet of your own home, it is your preference that you do so. You have an office at each location and, like many places of employment you find it difficult to accomplish your tasks with constant interruptions.

For this reason we do not consider your travel between work and home is an allowable deduction. However, we will look at whether you are required to carry bulky equipment.

Bulky equipment

There is no definition in the taxation legislation of ‘bulky’ for the purposes of considering the transportation of equipment between home and work. However, the courts have considered whether a deduction for the cost of travel between home and work may be allowable as a deduction if a taxpayer is required to carry bulky equipment (Federal Commissioner of Taxation v Vogt [1975] 1 NSWLR 194; 5 ATR 274; 75 ATC 4073).

The principle was further clarified in Case U107 (1987) 18 ATR 3544; 87 ATC 650. Here, the Administrative Appeals Tribunal (AAT) confirmed the principle in Vogt's Case applied and noted that the following factors should be considered in similar cases:

These tests have been applied in a number of subsequent cases: Case Z22 92 ATC 230; 23 ATR 1189, Case 43/94 (1994) 29 ATR 1031; 94 ATC 387 (Case 43/94), Crestani v. Federal Commissioner of Taxation (1998) 40 ATR 1037; 98 ATC 2219 (Crestani's case), Bajjada v. Commissioner of Taxation [1999] AATA 519, and Millgate v. Commissioner of Taxation [2000] AATA 1040.

In each of these cases, the AAT consistently found that the employment created a need for the taxpayer to transport the tools to and from work where security was inadequate. Where security was adequate, the AAT found that it was the personal choice of the taxpayer to transport the tools to and from home, rather than avail themselves of the facilities.

The AAT in Crestani’s Case also emphasised ‘volume and cumbersomeness’ as being of as much importance as weight in deciding whether tools are bulky. The transport cost was attributable to the transportation of such bulky equipment rather than private travel between home and work. Also, the employer did not provide a secure storage area for the toolbox.

You have stated that you carry your laptop, satchel and files with you to your home and to the other location.

This equipment is not considered to be bulky or cumbersome when considering previous court cases.

You are not entitled to a deduction for travel between home and work.

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