Edited version of private ruling

Authorisation Number: 1011594965535

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Ruling

Subject: Travel expenses

1. Are you entitled to a deduction for the expenses you incurred in travelling between home and work at a campsite?

No.

2. Are you entitled to a deduction for accommodation, meal and taxi expenses?

No.

This ruling applies for the following period

Year ending 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

You reside in Town A.

You signed a contract in Town A with an entity under the following conditions:

You are required to travel to other areas to work for a few days at a campsite and then you return home for a few days rest and recreation (R & R).

Your work site frequently changes due to wet weather.

On some occasions you are required to travel to Town B for pick up to the campsite (Town C).

You incur expenses to fly to Town B.

At the end of your shift at Town C you return to Town B to catch a return flight home to Town A. As your return trip from Town C to Town B arrives too late for a connecting flight home, you incur accommodation, meal and taxi expenses for staying overnight in Town B.

You carry various small tools and accessories in a toolbox weighing less than 10 kilograms (kg). The luggage includes your uniform and protective wear which you take home to launder. You have a room available to yourself at the camp site which can be locked. However, there is no absolute security.

You do not receive any travel allowance, however, you receive a few hours pay from your employer for travel time.

You have written evidence for all the expenses you incurred.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

You are not entitled to a deduction for the cost of travel, accommodation, meals and taxis between home and work as it is considered a private expense.

Detailed reasoning

Travel

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.

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. The availability of transport, time of travel, distance of travel or necessity of travel do not alter the essential private nature of travel between home and work. The cost of travel 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. (see paragraph 77 of Taxation Ruling TR 95/34)

However, there are situations where it has been accepted that travel by employees from home to work is deductible. These situations include:

· where the employment can be construed as having commenced at the time of leaving home, for example a doctor on call

· where you travel between home and shifting places of work, that is, an itinerant occupation

· the transportation of bulky equipment in some circumstances.

In your case you have not commenced work prior to leaving your home.

Itinerancy

Whether an employee's work is itinerant is determined by the nature of the individual's duties and not their occupation or industry. Further, itinerant work may be a permanent or temporary feature of an employee's duties.

Taxation Ruling TR 95/34 discusses the characteristics of itinerancy. Indicators of itinerancy that are relevant in your case include:

· Travel is a fundamental part of the employee's work. In FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335 (Wiener's Case), on four of the five working days the taxpayer's contract of employment required her to teach at no less than four different schools. The nature of the job itself made travel in the performance of the work duties essential, and therefore a fundamental part of her work.

· The existence of a 'web' of work places in the employee's regular employment. That is, the employee has no fixed place of work. An employee may earn income by performing his or her duties at several work sites, and the location of those sites may make it necessary to travel to the various sites. Therefore if an employee performs work at a single site and then moves to other sites on a regular basis, it would be considered that a 'web' of work places exists. In Wiener's Case, the taxpayer was required to attend four to five schools each day. This constituted a 'web' of work places.

· The employee continually travels from one work site to another. Continual travel refers to the frequency with which an employee moves from one work site to another. It envisages that an employee regularly works at more than one work site per day before returning to his or her usual place of residence.

And to a lesser degree

· the employer provides a travel allowance in recognition of the employee's need to travel between different work sites, and

· the employee has to carry bulky equipment from home to different work sites.

Whilst the above characteristics are not exhaustive, 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.

Travel a fundamental part of the employee's work

We consider that travel is not a fundamental part of your work. Unlike Wiener's Case where the teacher was required to regularly travel to four or five different schools in any one day, for the majority of the time, you travel to only one work location in a rotation. That is, you are not required to travel in the performance of your work once you commence work at a campsite.

A 'web' of work places

TR 95/34 also states that although an employee may perform his or her duties at more than one work location, this fact in itself may be insufficient to constitute a 'web' of work places for the purpose of itinerancy. Each work place may be regarded as a regular or fixed place of employment. The ruling goes on to explain that if the teacher in Wiener's Case had attended only one school each day instead of many, each school would have been regarded as a regular place of employment and a 'web' of work places would not exist. That is, a 'web' of work places must exist during each work day.

Although you perform your duties at more than one work location, for the majority of the time, you travel to only one work location (campsite) in any rotation. Therefore, each job site is considered to be your regular place of employment. As such, your employment does not constitute a 'web' of work places for the purpose of itinerancy.

Continual travel

For the continual travel criteria to be present in a work situation, as with the other characteristics of itinerancy above, the frequency of travel between work sites is an important element.

In Case T106 86 ATC 1192; AAT Case 17 (1987) 18 ATR 3093 (Case T106), a taxpayer employed as an 'off-sider' in the building industry was continuously dispatched (and therefore continually travels) to sites at various locations. On any one day it was not unusual for the applicant to attend two sites and he often attended different sites on successive days.

Unlike the above case, while you do perform your duties at more than one work location (campsite), you travel to only one work location in a work rotation. Therefore, continuous travel between work campsites is not considered a part of your employment duties.

Employer provides an allowance

You do not receive any travel allowance; however you receive a few hours pay from your employer for travel time. Receipt of any allowance does not, in itself, indicate that your work is of an itinerant nature. The payment of an allowance must be considered together with the other characteristics of your work.

In view of the above, your employment is not considered itinerant in nature because:

· travel is not a fundamental part of your duties

· there is no web of work places in your employment

· there is no continual travel between job sites, and

· each job site is considered to be a regular or fixed place of employment.

Therefore, the expenses you incurred are considered private and are incurred to put you in a position to perform the duties of your employment, rather than in the performance of those duties.

Although your work is not of an itinerant nature, we need to consider if you have to transport bulky equipment.

Bulky equipment

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 private travel between home and work.

A deduction is not allowable if the equipment is transported to and from work as a matter of convenience or personal choice.

A deduction is not allowable if a secure area for the storage of equipment is provided at the workplace.

The question of what constitutes 'bulky equipment' must be considered according to the individual circumstances in each case.

In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's Case), a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered as 'bulky', in the sense of 'cumbersome', in that the toolbox was not easily portable. 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.

However, in AAT Case 43/94 94 ATC 387; Case 9654 (1994) 29 ATR 1031 (Case 43/94), 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 x 55 cm wide x 50 cm deep (0.1925 m³) and weighing 20 kilograms when packed

· a suit bag which weighed 10 kg 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 facile transport.

You carry various small tools and accessories in a toolbox weighing less than 10 kg. The luggage includes your uniform and protective wear which you take home to launder. Your tool box is significantly lighter than the tool box considered in Crestani's Case. In addition you have a room available to yourself at the camp site which can be locked. Your situation is comparable to the facts in Case 43/94 and your tools and luggage are not considered to be bulky.

Accommodation, meals, taxi expenses

The travel expenses you have incurred are not considered to be as a result of your income earning activities. The expenses are incurred by you in putting yourself in a position where you can perform your duties, rather than in the performance of your duties. Therefore, you are not entitled to a deduction for the travel expenses you incur.

Accommodation and meals

Generally, accommodation and food expenses incurred by an employee who lives away from home to carry out the duties of his employment will not be deductible. Expenses of this nature have been found to be private or incurred before or after the activity of earning assessable income.

This is supported by the decision in FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466, where the Federal Court held that expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location were not an allowable deduction as they were considered to be private expenses.

Accordingly, the accommodation, food and taxi expenses you incurred in travelling to the campsite are private and domestic in nature. They are not incurred during the actual performance of your work - that is during the production of assessable income. Therefore, you are not entitled to a deduction for these expenses.