Edited version of private ruling

Authorisation Number: 1011614300009

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Ruling

Subject: Work related expenses

Question and answer:

Are you able to claim travel expenses between your home and a place of work?

No.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commenced on:

1 July 2010

Relevant facts and circumstances

You carry on a business as a xxxx.

You carry out work at home.

You do not have an office set up at home and use your bedroom and lounge room to carry out your work.

You also work out of other premises 10 minutes away from your home.

You go to the premises 6 days a week.

Upon your return from the premises you continue to work at home.

You are currently keeping a log book.

You will continue to maintain a log book.

You will retain all receipts and documents as required.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-5.

Income Tax Assessment Act 1997 Section 12-5.

Income Tax Assessment Act 1997 Subsection 995-1(1).

Income Tax Assessment Act 1997 Section 25-100.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a general deduction for 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.

For expenditure to be regarded as being incurred in the course of gaining or producing assessable income, it must be incidental and relevant to that end (Ronpibon Tin NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; 8 ATD 431; (1949) 4 AITR 326). The expenditure must be related to the production of assessable income and not incurred at a point too soon to be deductible (Federal Commissioner of Taxation v. Maddalena 71 ATC 4161; (1971) 2 ATR 541 and Steele v. Deputy Commissioner of Taxation (1999) CLR 459; 99 ATC 4242; (1999) 41 ATR 139).

Expenses incurred in travelling are deductible expenses under where they are incurred in gaining or producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. Expenses of simply commuting between home and place of work are generally not deductible (Income Taxation Ruling IT 112).

Expenses incurred in travelling directly between two places of business or a place of employment and a place of business are an allowable deduction where the taxpayer does not live at either of the places and the travel was undertaken for the purpose of enabling the taxpayer to engage in income producing activities (Income Tax Ruling IT 2199).

Section 25-100 allows deductions for travel between workplaces where:

· The taxpayer is an individual;

· The expense is a transport expense; and

· The expense is incurred in travel between workplaces.

However subsection 25-100(3) of the ITAA 1997 specifies that travel between two places is not travel between workplaces if one of the places you are travelling between is a place at which you reside.

In your case you reside at one of the places you work.

Therefore you are not entitled to a deduction for the travel between your place of residence and your other place of business.