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Edited version of your written advice
Authorisation Number: 1012755464101
Ruling
Subject: Deductions for travel expenses
Question 1
Are you entitled to a deduction for travel between your two work places?
Answer
Yes
Question 2
Are you entitled to a deduction for travel from your home to your first work place or from your second work place back to your home?
Answer
No
Relevant facts and circumstances
On each day where you worked in Y you first travelled to your employment at X where you started work.
After completing work at X you would travel directly to Y. After finishing at Y you travelled to your home.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Reasons for decision
Travel between workplaces
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.
A deduction is allowed where you travel directly between two work places and you do not reside at either workplace.
Home to work travel
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).
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, and
• the employee has to transport by vehicle bulky equipment necessary for employment.
None of the above circumstances applies to your situation and consequently you will not be allowed a deduction for travel from Y back to your residence. Further your workplace at Y is not an alternative workplace as it is a regular place of employment (see paragraph 34 of Miscellaneous Taxation Ruling MT 2027).