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Ruling

Subject: Travel expenses

Question

Are you considered to be carrying out itinerant work and entitled to a deduction for the cost of travelling to and from work?

Answer

No

This ruling applies for the following period

Year ending 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

You work at a number of different ports in different states across Australia for the one employer.

You usually work 7days a week and have time off during the quiet months of the year.

You are given advance notice of where you required to work and may spend up to three weeks at the one port at a time, although the length of stays may vary and be as low as one day.

Your employer usually plays for your airfares, on occasions due to budget restraints you have been required to pay for your own airfares.

You pay for all your own accommodation expenses booking through a real estate agent for private rentals for short term leases.

You pay for all taxi expenses between the airports and your worksites.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

Your employment is not itinerant in nature, travel the expenses you incur in airfares, accommodation, taxi and car travel are private. Therefore, no deduction can be claimed for the cost of these expenses.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all outgoings to the extent to which they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature.

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 and the necessity of travel do not alter the essential character of travel between home and work from being private in nature.

The essential character of the travel to and from work is that of a private and domestic nature, related to personal and living expenses as part of the taxpayer's choice of where to live, in choosing to live away from and what distance from work.

However, where a persons occupation is itinerant, the courts have found that the cost of travelling between the taxpayer's home and their work is so closely related to producing their income that the travel loses its private character and a deduction can be claimed.

A job is regarded as itinerant where travel is an essential feature of the work; one example of an itinerant job is that of travelling salesperson. The question of whether particular persons' employment was itinerant has been considered by the courts in a number of cases.

In FC of T v Genys 87 ATC 4875; (1987) 19 ATR 356 (Genys' case), a nurse used an agency to find relief work at various hospitals. She would receive notification from the agency of where she was to work by telephone and would travel directly to the hospital at which she was to relieve. The Federal Court found that, while the taxpayer was unable to predict where she would be required to work from day to day and she was given short notice of her work place for the day, her work was not itinerant. Instead, the court found that the taxpayer was travelling from home to work and that the expenses of this travel were private. Consequently, no deduction was allowed for this taxpayer's car expenses

In your case, you work at a number of different ports for the one employer. You are given advance notice of where you required to work and usually spend several days at the one port at a time, incurring accommodation and other travel expenses. Based on these facts, the terms of your employment are similar to those of the taxpayer in Genys' case. Therefore, your employment as a turnaround manager cannot be regarded as itinerant in nature.

As your employment is not itinerant in nature, the expenses you incur in airfares, accommodation, taxi and car travel are private. Therefore, no deduction can be claimed for the cost of these expenses.