Edited version of your private ruling

Authorisation Number: 1012529684097

Ruling

Subject: Motor vehicle expenses

Question 1

Are you entitled to a deduction for the cost of travelling between home and work or a training course?

Answer

No.

Question 2

Are you entitled to a deduction for the cost of travelling between one client and the next client or between a client and a training course?

Answer

Yes.

Question 3

Are you entitled to a deduction for the cost of travelling from home to your client on occasions when you are required to read a Support Plan prior to leaving home?

Answer

No.

Question 4

Are you entitled to a deduction for the cost of a watch?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2013

The scheme commenced on

1 July 2012

Relevant facts

You work for an agency who call you and offer work.

You travel from home to your client's home. You sometimes return home again or sometimes travel on to another client before returning home.

You are required to undertake training courses. Sometimes you travel to the course and return home. Sometimes, you travel from a client to the training prior to returning to the client or home.

You are required to wear a watch for work purposes. You purchased a watch which you also wear when not working. The watch is an ordinary watch with a second hand.

You are sometimes sent a client support plan which you read at home prior to going to the client's home.

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 and outgoings to the extent to which they are incurred in the course of gaining or producing assessable income, but are not allowable to the extent that they are of a capital, private or domestic nature.

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 (see paragraph 77 of Taxation Ruling TR 95/34).

However, there are situations where it has been accepted that travel by employees from home to work is deductible. Taxation Ruling IT 2543 summarises these situations as follows: 

a) the taxpayer's home constitutes a place of employment and travel is between two places of employment or business; 

b) the taxpayer's employment can be construed as having commenced before or at the time of leaving home; 

c) the taxpayer has to transport by vehicle bulky equipment necessary for employment; 

d) the taxpayer's employment is inherently of an itinerant nature; 

e) the taxpayer is required to break his or her normal journey to perform employment duties (other than including incidental duties such as collecting newspapers, mail, etc.) on the way from home to the usual place of employment, or from the place of employment to home.

In your case, your home is not a place of employment. That is, you do not care for clients at your home. Furthermore, even though you read Support Plans prior to going to the client's home, it is considered that your employment commences when you start to care for the client.

The question of whether an employees work is itinerant is one of fact, to be determined according to individual circumstances. It is the nature of each individual's duties and not their occupation or industry that determines if they are engaged in itinerant work.

In FC of T v. Genys (1987) 17 FCR 495; 87 ATC 4875; (1987) 19 ATR 356 (Genys case), the Federal Court held that the taxpayer's employment was not itinerant. The taxpayer was a registered nurse who used an employment agency to seek relief work with various hospitals. She was not continuously employed by any one hospital. When a hospital was in need of additional staff they contacted the agency which would then contact the taxpayer. It was integral to the decision in this case that the taxpayer did not travel after the commencement of her duties. She merely travelled to work and home again. Northrop J (FCR at 498; ATC at 4879; ATR at 359) described itinerant as 'shifting places of work':

'...where the taxpayer travels between home and shifting places of work, that is, an itinerant occupation.'

Similarly, your work cannot not be deemed "itinerant" because:

· You know in advance where you are going to work.

· On those working days when you were required to provide home care you usually only have one client per day. There is therefore no continual travel from one work site to another.

· Your travel is not of sufficient frequency to enable it to be regarded as part of your work.

Your situation does not correspond with any of the situations in Taxation Ruling IT 2543. Therefore, a deduction is not allowable for your home to work or training travel.

However, on occasions where you travel from one client to another or to training, this travel is considered to be travel on work and not to work. As such, the travel between the two places of employment or training is considered to be deductible.

Watch

Taxation Ruling TR 95/15 discussed work related deductions for nursing industry employees and states that a deduction is not allowable for the cost of buying or repairing an ordinary wrist watch as the cost is a private expense.

In Case S82 85 ATC 608; 28 CTBR (NS) Case 87 , a qualified nurse claimed a deduction for the cost of replacing a conventional wrist watch specifically purchased for and used in her work, although it was also worn at other times. It was held that the cost of the watch was private in nature and no deduction was allowable.

Similarly, the watch you have purchased is considered to be private in nature and no deduction is allowable.