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Edited version of your private ruling
Authorisation Number: 1012465047010
Ruling
Subject: Work-related car expenses
Question
Are you entitled to a deduction for motor vehicle expenses in relation to travel between home and Location B?
Answer: No
This ruling applies for the following period
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
1 July 2010
Relevant facts
You are employed.
Your employer has two locations; one at Location A and the other at Location B.
Your principal place of employment is at Location A.
Once a week you are required to attend Location B, before travelling to your principal place of employment.
You drive your private motor vehicle from your home to Location B and then to Location A.
You incur motor vehicle expenses in relation to your travel.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) generally allows a deduction for any loss or outgoing to the extent that it is incurred in gaining or producing assessable income.
It is settled law that expenditure incurred in travelling to and from the normal workplace is not deductible as it is not incurred in, or in the course of, gaining or producing assessable income (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478). The general rule, as discussed in Taxation Ruling IT 112, is that travel between home and a person's regular place of employment or business is ordinarily private travel. While travel to work is a necessary pre-requisite to earning income, it is not undertaken in the course of earning that income.
Therefore consideration needs to be given to determine whether Location B constitutes an alternative workplace, whereby travel to it is considered to be made on work, or merely represents a regular workplace in which travel is required to get to work. In your application you referred to Taxation Ruling MT 2027.
TR MT 2027 provides three principles in paragraphs 28 to 36 to determine whether expenses incurred in travel from home to an alternative workplace are deductible.
These three principles are:
· The employee has a regular place of employment to which he or she travels habitually;
· In the performance of his or her duties as an employee, travel is undertaken to an alternative destination which itself is not a regular place of employment; and
· The journey is undertaken to a location at which the employee performs substantial employment duties.
From Home to Location B
In your case you were stationed at two different locations, Location A and Location B. The regularity of time spent at each location prevents you from satisfying the second principle in MT 2027 which requires that the alternative destination be one that is not a regular place of employment.
As you are required to attend Location B one day a week, it is considered to be a regular place of employment, rather than an alternative destination according to MT 2027. Consequently the travel expenses incurred in travelling from your home to Location B are not deductible under section 8-1 of the ITAA 1997.