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Edited version of private advice
Authorisation Number: 1012684654413
Ruling
Subject: Work related travel expenses
Question
Are you entitled to a deduction for expenses incurred in maintaining and repairing your vehicle, which you use primarily as a work vehicle in your mobile business?
Answer
Yes.
This ruling applies for the following period:
Year ended 30 June 2014
The scheme commences on:
1 July 2013
Relevant facts and circumstances
You have a regular job as an employee, which you do not claim any travel expenses for as you are not entitled to such deduction.
You also run a private business from your home. You would like to claim a deduction for travel expenses you incurred while acting in this capacity.
You have two regular clients who you travel to.
You purchased a new vehicle which you use predominantly for business purposes, travelling to and from your home and clients. You use the vehicle for XX% for work purposes and XX% for personal use.
You have incurred repair and maintenance costs (apportioned accordingly to the percentage of business use).
You travelled X business kilometres.
Relevant legislative provisions
Income Tax Assessment Act 1997 (ITAA 1997) section 8-1
Income Tax Assessment Act 1997 (ITAA 1997) section 25-100
Reasons for decision
A "transport expense" is defined in section 900-220 of the Income Tax Assessment Act 1997 (ITAA 1997) as a loss or outgoing to do with transport but not including a loss or outgoing for accommodation or for food or drink, or expenditure incidental to transport. Transport expenses, therefore, include car expenses, expenses of other motor vehicles, of motorcycles and bicycles and public transport fares such as bus and train fares.
In your case, you have incurred transport expenses relating to your vehicle which you used in travelling between places of work for income producing purposes.
Section 25-100(1) of the ITAA 1997 provides a deduction for transport expenses when travelling between two places of work. Section 25-100(3) of the ITAA 1997 excludes a deduction if one of the places you are travelling between is a place at which you reside. In your situation, your home is a place of work and your client's another. Consequently, you are unable to claim a deduction under section 25-100(1) of the ITAA 1997.
However, since your residence is considered a base of operations for your business activity, a deduction is available under section 8-1 of the ITAA 1997 for transport expenses to and from your home and various clients' premises (Taylor v Provan (1975) AC 194).
You incurred maintenance and repairs expenses for your vehicle, relating directly to your income producing activities under your mobile business. Accordingly, this amount is able to be deducted under section 8-1 of the ITAA 1997 as a travel expense.