Edited version of private advice

Authorisation Number: 1051622789381

Date of advice: 20 December 2019

Ruling

Subject: Travel deduction - home to work - itinerancy and bulky items

Question 1

Are you entitled to a deduction for travel expenses incurred when travelling between your home and workplaces?

Answer

No.

Question 2

Are you entitled to a deduction for travel expenses incurred when travelling between two different workplaces?

Answer

Yes.

This ruling applies for the following period

Year ended 30 June 20XX

The scheme commenced on

1 July 20XX

Relevant facts and circumstances

You are employed on a casual basis.

Your employer offers you rostered shifts at various bases within a commuting distance from your home.

You are required to commute from your home to the bases at your own expense.

Your roster generally results in you working subsequent shifts at different bases.

Commuting times from your home to the different work bases varies from ten minutes to more than one hour.

On occasion you are required to travel between work bases after the commencement of your rostered shift using your own transportation.

Your home is not base of operations and you do not work from home.

You are not paid for travel between your home and work bases or for your travel between different work bases.

You receive on average 3 to 4 days advanced notification of your rostered shift base localities. The notice period varies from the same day up to one month.

You are not under your employer's instruction whilst you are travelling from home to the bases.

Your employer instructs you to have available at the commencement and for the duration of your rostered shift, the following PPE:

·   Protective eyewear

·   nitrile gloves

·   P2 masks

·   high visibility vests

·   hearing protection

·   helmet

·   disposable coveralls, and

·   over boots.

Your employer provides the following work instruction to you regarding your operational uniform:

·   you must wear the supplied uniform, and

·   you must ensure that you have a change of uniform available whilst rostered on shift.

You transport your PPE and spare uniform in a duffle bag of approximately 11 kilograms packed weight, measuring length 52 cm, width 42 cm and height 37 cm.

Lockers and storage are available at each base.

Relevant legislative provision

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, or a provision of the taxation legislation excludes it.

Travel between home and work

Draft Taxation Ruling TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees' travel expenses? (at paragraph 15) expresses the view that an employee's ordinary costs of travelling between home and work are of a private or domestic nature and are not deductible. Such costs are 'preliminary to the work' and are not incurred in performing the work activities. This view is based on the decision in Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478; 11 ATD 404.

A deduction for travel expenses between home and work may be allowed if an employee's work is itinerant and/or there is a requirement to transport bulky equipment.

Itinerancy

The question of whether an employee's work is itinerant is one of fact, to be determined according to individual circumstances. It is the nature of each individual's duties and not their occupation or industry that determines if they are engaged in itinerant work. Further, itinerant work may be a permanent or temporary feature of an employee's duties.

Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses (at paragraph 7) cites certain indicators of itinerancy that have emerged from case law. The indicators are not exhaustive but they provide guidelines for determining whether an employee's work is itinerant. It is considered that no single factor on its own is necessarily decisive.

The following characteristics are 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 site;

                   iv.        the employer provides and allowance in recognition of the employee's need to travel continually between different work sites.

In FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335 (Wiener's case), a teacher was required to teach at a minimum of four different schools ('web' of work places) each day, and comply with a strict timetable that kept her on the move throughout each of these days. The Supreme Court of Western Australia concluded that travel was inherent in her employment. The nature of the job itself made travel in the performance of her duties, essential. It was a necessary element of her employment that transport was available at whichever school she commenced her duties and remained at her disposal throughout each work day.

In contrast to Wiener's case, you are not required to travel between a 'web' of work places on a continual daily basis. You are notified your work bases in advance of your work shifts. Your home does not constitute a base of operations for your work. Each work site would be regarded as a regular place of employment and travel is not a fundamental part of your work. You do not receive an allowance from your employer in recognition of the need to travel on work continually between different work bases. On occasion you have been required to travel between work bases however this is not a regular pattern of your employment.

On consideration of the whole of your individual circumstances, you cannot be considered as an itinerant worker.

On the days after commencing your duties, where you are required to travel to a different work base; it is considered you are travelling on work rather than to work. This travel is undertaken in the performance of your duties, and you will be entitled to claim a deduction for expenses incurred for this travel.

Bulky Items

A deduction may be allowable for home to work travel if the transport costs can be attributed to the transportation of heavy, bulky or cumbersome equipment, rather than to the private travel between home and work.

The Administrative Appeals Tribunal in Crestani v. FC of T 98 ATC 2219; 40 ATR 1037 found the taxpayer's toolbox measuring 25 cm * 28 cm * 57 cm and weighing 27 kilograms was bulky and cumbersome. In this case, the taxpayer was an aircraft engineer who worked at Sydney Airport. They transported their toolbox home at the end of each shift as there was no secure storage at work. The Tribunal held that the home to work travel was attributed to the transportation of these tools and the expenses incurred in transporting these tools were deductible.

In Case 43/94 94 ATC 387, a flight sergeant with the Royal Australian Air Force was denied a deduction for the cost of transporting his flying suit and other items used for work purposes. These items were carried in:

·   a duffle bag measuring 75 cm long, 55 cm wide, 50 cm deep and weighing 20 kilograms when packed

·   a suit bag which weighed 10 kilograms when packed, and

·   a briefcase-sized navigational bag which contained charts, work manuals and study materials.

It was held that the mode of transporting the items was simply a consequence of the means adopted by the taxpayer to convey him to work. It was considered that the duffle bag was not of sufficient size or weight to impede transport.

In your case, as you are infrequently rostered at the same work base it is impractical; for you to store your PPE and spare uniform at the bases. This necessitates you transporting this equipment with you on your travel from home to your rostered work bases. However, your duffle bag of 11 kilogram packed weight, measuring 52 cm long, 42 cm wide and 37 cm high, is not considered to be of a size or weight to impede transport. It is designed to be easily carried and is not considered a bulky item to which travel costs could be attributed.

Consequently, the expenses you incur in travelling between home and your workplace and back home are private or domestic in nature and therefore no deduction is allowable under section 8-1 of the ITAA 1997.

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