Edited version of your written advice

Authorisation Number: 1012691753485

Ruling

Subject: Taxi fares, accommodation and meals

Question

Are you entitled to a deduction for taxi fares, accommodation and meals?

Answer

No.

This ruling applies for the following periods

Year ended 30 June 2013

Year ended 30 June 2014

Year ended 30 June 2015

Year ended 30 June 2016

Year ended 30 June 2017

The scheme commenced on

1 July 2012

Relevant facts

You are an employee working on a roster in a remote location.

Your employer pays for your flights to and from your home city.

Your employer has implemented a fatigue management policy which prevents you from flying directly from interstate to site. You must have a fatigue break between landing in City A and flying to the work site.

Because of the remoteness of your work location and infrequency of flights, you have to stay overnight in City A. You incur accommodation and meal expenses whilst in City A.

You incur taxi fares between your accommodation and the airport.

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 gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.

Meal expenses are normally private or domestic in character. However, where a taxpayer is travelling away from home overnight in connection with an income producing activity, meal expenses may be deductible.

In order to consider the deductibility of meal expenses the deductibility of travel expenses must be firstly considered.

A distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties that the taxpayer's expenses can be deducted (Taylor v Provan 1975 AC 194).

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 this travel is incurred to put you in a position to perform your duties of employment, rather than in the performance of those duties. (Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses).

In your case, you incur expenses for accommodation and meals to enable you to commute between your home in one state and your employment in another state and comply with the fatigue management policy. Whilst the expenses may not be incurred but for your employer's fatigue management policy, the expenses are a prerequisite to the earning of assessable income made necessary because you live interstate. They are incurred in order to enable you to earn income but are not incurred in the course of gaining or producing that income. It is not considered that the conditions of your employers fatigue management policy mean that you have begun work. Your work begins at the work site and therefore the expenses are not incurred in the course of earning assessable income.

A deduction is therefore not allowable for your accommodation or meal expenses.

Taxi fares

Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or because it is not an expense incurred in gaining or producing assessable income.

In your case, you incur taxi fares travelling between your accommodation in City A and the airport. This travel is not incurred in doing your work. Rather, the expense is incurred in getting you to work. As such, it is considered to be private travel and a deduction is not allowable.