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Ruling
Subject: Work related expenses - travel
Question
Are the costs of your return airfares, accommodation and meals deductible as a work related expense?
Answer
No
This ruling applies for the following period:
Year ending 30 June 2012
The scheme commences on:
01 July 2011
Relevant facts and circumstances
You work for a company.
You carry out two different roles for the company.
You live and work in City X but are required to fly to City Y once a week to carry out your secondary role for the company.
After finishing your secondary role, you return to City X.
You are required to pay for your return airfares, accommodation and meals when you travel to City Y.
Your employer does not reimburse you for any of these expenses.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) states that you can deduct a loss or outgoing if it is incurred in producing your assessable income except where the outgoing is of a capital, private or domestic nature.
A deduction is generally not allowable for the cost of travel between home and work because the expenses are not considered to be incurred in producing assessable income.
The case of Lunney v. Commissioner of Taxation [1958] ALR 225;1958 - 0311H - HCA;100 CLR 478;(1958) 11 ATD 404;(1958) 32 ALJR 139 settled the principle that travel to and from work is generally not deductible under section 8-1 of the ITAA 1997 as it is considered to be of an essentially private or domestic nature.
In your case, you are required to pay for return airfares, accommodation and meals when you travel to City Y.
Although these expenses allow you to get to a location to carry out your employment activities it is considered that these expenses are actually incurred whilst travelling to work rather than travelling on work.
Accordingly the costs that you incur when you travel to City Y are considered to be private in nature and therefore not deductible as a work related expense.