Edited version of your written advice

Authorisation Number: 1012693340711

Ruling

Subject: Home to work travel

Question

Are you entitled to a deduction for the cost of travelling between home and work on the basis that your employment is considered itinerant?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts

You are employed as a relief employee.

You are required to travel to locations within a certain radius of your home.

The duration at each location can be one day, several days, weeks or a month.

You travel home each day after working at a location.

You do not begin your work at home and you are not required to carry bulky equipment between home and work.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 broadly allows a deduction for any losses or outgoings to the extent to which they are incurred in gaining or producing assessable income except to the extent outgoings are of a capital, private or domestic nature.

A deduction is generally not allowable for the cost of travel between home and work as it is considered to be a private expense. Expenditure incurred in travelling to work is a prerequisite to the earning of assessable income rather than being incurred in the course of producing that income. That is, the duties of an employee do not commence until the arrival at a place of work and will cease upon departure from work. The essential character of the expenditure is of a private or domestic nature, relating to personal and living expenses and therefore not an allowable deduction. (Lunney v FCT (1958) 100 CLR 478).

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. 

However, a deduction may be allowed for home to work travel expenses in certain exceptional circumstances, for example:

• the employees home constitutes a place of employment and travel is between two places of employment,

• the employees employment is inherently of an itinerant nature, or

• the employee has to transport by vehicle bulky equipment necessary for employment.

As your home does not constitute a place of work and you are not required to transport bulky equipment, consideration is only required to determine if your travel is inherently of an itinerant nature.

Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses provides guidelines for establishing whether an employee is carrying out itinerant work. These guidelines have been established through the views taken by the Courts, Boards of Review and Administrative Appeals Tribunal in deciding when an employee's work is itinerant.  The following characteristics have emerged from these cases as being indicators of itinerancy:

• Travel is a fundamental part of the employees work.

• The existence of a web of work places in the employee's regular employment, that is, the employee has no fixed place of work.

• The employee continually travels from one work site to another.  An employee must regularly work at more than one work site before returning to his or her usual place of residence.

• The employee has a degree of uncertainty of location in his or her employment (that is, no long-term plan and no regular pattern exists).

The characteristics above provide guidelines for determining whether an employee's work is itinerant. It is considered that no single factor on its own is necessarily decisive.

In your situation:

• Travel is not considered a fundamental part of your work;

• You are not continually travelling from one work site to another before returning to your place of residence; and

• The degree of uncertainty you experience is not sufficient to support your employment as being itinerant (that is, no long-term plan and no regular pattern exists)

Even though you travel to various locations to undertake your work, travel is not considered to be a fundamental part of your work. Your work does not commence until you arrive at the work location. An example at paragraph 28 of TR 95/34 is similar to your situation in respect of your travel not being considered as a fundamental part of your work.

27. Example: Eleni is an agency nurse who travels to several hospitals to relieve staff shortages. She is employed by the hospital for whom she performs the duties. Eleni remains at the one hospital until completion of her shift. Travel is not a fundamental part of Eleni's employment, as she is not required to travel in the performance of her work once she commences duty. Eleni's employment is not considered to be itinerant.

As you are not continually travelling from one work site to another before travelling home and it is not considered that the degree of uncertainty is sufficient for you to be considered itinerant, consideration is only required to be given as to whether your travel would be itinerant because you have a 'web of work places'.

In Case U97 87 ATC 584; AAT Case 68 (1987) 18 ATR 3491, the taxpayer was employed as a fireman. He was attached to a fire station located close to his home in a northern suburb of Sydney, but for some years worked as a relief fireman. In that capacity, he was commonly sent to other fire stations in the Sydney fire district. The only distinguishing feature of his claim was that he travelled to one outer station regularly for a number of days then another outer station for another period. In deciding that the taxpayer was not itinerant, Senior Member McMahon stated (ATC at 588; ATR at 3495-3496):

'There is not the web of workplaces that one looks for as a structure for the applicant's working life if that life is to be regarded as itinerant.'

Your work is similar to case U97 and it is not considered that your travel is itinerant under the' web of work places' criteria.

Therefore, none of the characteristics apply to make your travel deductible as your travel is not considered to be itinerant in nature.