Edited version of private ruling

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Ruling

Subject: Travel to work and meals expenses

1. Is the cost of airfares, airport transfers and motor vehicle expenses incurred in getting you from your residence to your work site in another state an allowable deduction?

No.

2. Is the cost of meals incurred at the work site deductible when a daily allowance is paid because meals are not provided?

No.

Relevant facts and circumstances

You are a trades assistant.

You reside in one state and contract your services to a number of businesses through a company (the principal) based in another state.

You travel from your home by private car and airport transfer bus and catch a direct flight from your state to the other state. All costs associated with travel to this point are met by you.

You then travel to the work site at the principal's expense.

You carry tools and personal luggage of about 15kg with you on each trip and incur excess baggage fees when your luggage including your tools exceeds the limit imposed by the air carrier.

At some sites meals are provided but other sites do not provide meals and on these occasions you are paid a daily allowance to cover the cost of food.

Reasons for decision

Question 1

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 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.

The mode of transport or distance of travel do not alter the essential private nature of travel between home and work.

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, and

· the transportation of bulky equipment in some circumstances.  

In your situation, your work has not commenced before leaving home and you are not considered itinerant. You do carry some work equipment while travelling, therefore the issue of bulky equipment will be addressed further.

In the case of bulky equipment, the cost is attributed to the transportation of the bulky equipment rather than private travel between home and work where the transportation of the equipment is essential and is not done as a matter of personal choice or convenience and there is no secure storage provided at the workplace.

The Administrative Appeals Tribunal in Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's case) found the taxpayers toolbox measuring 25cm x 28cm x 57cm and weighing 27kg 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 and the tribunal held that the home to work travel was attributed to the transportation of these tools. The expenses incurred in transporting these tools were deductible and the taxpayer was simply one of those fortunate few who are able to hitch a free ride on his tool box. 

In your situation, you take various tools of your trade with you when travelling between home and work. You usually carry about 15kg of luggage with you including your tools. The tools are thus considerably lighter than those in Crestani's case and are therefore not considered to constitute bulky tools.

As such, the motor vehicle costs involved in getting the tool box and yourself as the carrier from your residence are not deductible.

The airfares for yourself between your home state and the capital city of the state where you work are not deductible as they are clearly private in nature in that they do no more than get you part of the way to the place where you are in a position to start work. Further, since the tools are not considered to be bulky no deduction is allowable for any excess baggage charge attributable to them.

Question 2

Meals are also usually not allowable as a deduction because of the working of section 8-1 of the ITTA 1997 as it essentially involves the purchase of food and drink for the sustenance of life. This view was expressed by Viscount Cave LC in Ricketts v Colquhoun (1926) 10 TC 118, who observed (at p.134):

A man must eat and sleep somewhere, whether he has or has not been engaged in the administration of justice. Normally he performs those operations in his own home, and if he elects to live away from his work so that he must find board and lodging away from home, that is by his own choice, and not by reason of any necessity arising out of his employment; nor does he, as a rule, eat or sleep in the course of performing his duties, but either before or after their performance.

The receipt of an allowance does not entitle a taxpayer to a deduction regardless of whether the allowance is paid under an industrial agreement or not. However, there is an exception to this where the allowance paid is an overtime meal allowance.

In your case there is no overtime meal allowance and the allowance is paid to compensate for the extra cost involved in you having to purchase breakfast, lunch and dinner whilst situated at particular work sites. The purchase of these meals remains a private expense and is therefore not deductible in terms of section 8-1 of the ITAA 1997.