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Ruling

Subject: Living away from home expenses

Question

Are you entitled to a deduction for accommodation and meal expenses incurred while working away from home?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2011

The scheme commenced on

1 July 2010L

Relevant facts

You work away from your family residence doing temporary work as an employee.

You get sent to different locations all over Australia to do a particular job and once this job is completed you return home to your family residence until you receive a call for your next job.

The duration of these temporary jobs is between 4 to 10 weeks.

You have kept a written travel diary recording all accommodation expenses while living away from your family residence.

You have incurred expenses relating to your accommodation and meals.

Assumptions

None.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a private or domestic nature.

Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless one arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166).

Accommodation and meal expenses are living expenses and as such are intrinsically private or domestic in nature. However, these expenses may be considered to be work related where they are incurred while an employee is travelling on work.

Miscellaneous Taxation Ruling MT 2030 discusses the difference between travelling on work and living away from home for work. It states that travelling on work occurs where the employee is travelling in the course of carrying out their duties of employment (such as an interstate truck driver) whereas a person is living away from home for work where they have a new work location.

In your case, you are working and living at these different locations for 4 to 10 weeks at a time. It is considered that during these periods you were living away from home for work rather than travelling on work. That is, during these periods you were living in these locations and you travelled because your work had been moved to those locations for those periods. Travel was not a part of your actual work duties.

As you were not travelling in the course of carrying out employment duties, no deduction is available for the accommodation and meal expenses you incurred when working away from your usual place of residence. Further to this the essential character of your expenditure is of a private or domestic nature. The expenses incurred by you to stay in close proximity to your work-place were a prerequisite to the earning of assessable income and were not expenses incurred in the course of gaining or producing that income.