Edited version of your written advice

Authorisation Number: 1012999054894

Date of advice: 21 April 2016

Ruling

Subject: Deductions - itinerant workers - work related, transport and travel expenses

Question 1

Is the employee considered to be an itinerant employee, and as such can they claim all costs associated with transport in relation to tribunal work conducted for tribunal A?

Answer

No.

Question 2

In relation to your employment with tribunal A, can you claim transport costs when you travel directly from your main residence at location A to location C?

Answer

No.

Question 3

In relation to your employment with tribunal A can you claim transport costs when you travel directly from your place of work at location B to location C and you engage in activities to gain or produce your assessable income at both workplaces?

Answer

Yes.

Question 4

In relation to your employment with tribunal A, can you claim meals and accommodation where you have been required to stay overnight when working at location C for consecutive days?

Answer

No.

Question 5

Is the employee considered to be an itinerant employee, and as such can they claim all costs associated with, transport in relation to tribunal work conducted for tribunal B?

Answer

No.

Question 6

In relation to your employment with tribunal B, can you claim transport costs when you travel directly from your main residence at location A to the tribunal location and you engage in activities to gain or produce your assessable income at both workplaces?

Answer

No.

Question 7

In relation to your employment with tribunal B can you claim transport costs when you travel directly from your place of work at location B to the tribunal location?

Answer

Yes.

Question 8

In relation to your employment with tribunal B can you claim meals and accommodation where you have been required to stay overnight when working at the tribunal location for consecutive days?

Answer

No.

Question 9

Is the employee considered to be an itinerant employee, and as such can they claim all costs associated with transport in relation to tribunal work conducted for tribunal C?

Answer

No.

Question 10

In relation to your employment with tribunal C, can you claim transport costs when you travel directly from your main residence at location A to the tribunal location and you engage in activities to gain or produce your assessable income at both workplaces?

Answer

No.

Question 11

In relation to your employment with tribunal C, can you claim transport costs when you travel directly from your place of work at location B to the tribunal location?

Answer

Yes.

Question 12

In relation to your employment with tribunal C, can you claim meals and accommodation where you have been required to stay overnight when working at the tribunal location for consecutive days?

Answer

No.

This ruling applies for the following periods:

Year ending 30 June 2016

Year ending 30 June 2017

Year ending 30 June 2018

The scheme commences on:

1 July 2015

Relevant facts and circumstances

Your principle place of residence is at location A.

You are employed with employer A.

Employer A operates from two locations. These locations are:

• location A

• location B

You have also been employed at the following tribunals:

• Tribunal A

• Tribunal B

• Tribunal C

Location A is the main premises where you prepare for tribunals.

Your work as a member of a tribunal involves multiple stages of work. Each stage of work is carried out at various locations.

With tribunal A, you have been provided an office space, at location C. All tribunal hearings are held at location C, However your work is performed at various locations, including location A, location B, location C, and accommodation near location C.

With tribunal B, you have not been provided an office space by your employer. Furthermore there are multiple tribunal locations across the state, which you are required to attend. Your work with tribunal B is performed at various locations, including location A, location B, tribunal locations throughout the state and accommodation near tribunal locations.

With tribunal C, you have not been assigned an office space by your employer. Your work with tribunal C, is performed at various locations, including location A, location B, tribunal locations throughout another state and accommodation near tribunal locations.

In relation to your commitments at tribunal locations, you are made aware, at least a month in advance, of when and where you are required to attend.

In some instances travel by plane is arranged by tribunal B.

You only receive a reimbursement for costs associated with travelling to and from the accommodation and tribunal location, in relation to your employment with tribunal C.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1,

Income Tax Assessment Act 1997 section 25-100,

Income Tax Assessment Act 1997 subsection 25-100(1) and

Income Tax Assessment Act 1997 subsection 25-100(3).

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all outgoings to the extent to which they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature.

Characteristics of an Itinerant Worker

Where you are an itinerant worker, you can claim all transport expenses incurred by carrying out your itinerant work. Transport expenses include public transport fares and the running costs associated with using motor vehicles for work-related travel. They do not include the cost of travel expenses, for example accommodation, meals and incidental expenses. However in order to be considered an itinerant worker, your employment must have the characteristics or indicators of an itinerant worker. The characteristics and indicators of itinerancy as listed in Taxation Ruling TR 95/34 can be seen below.

Travel is a fundamental part of your employment.

In Taylor v. Provan AC 194 Lord Simon said at 221:

...the obligation to incur the expense of travelling in question must arise out of the nature of the office or employment itself, and not out of the circumstances of the particular person appointed to the office or employed under contract of employment...

In FC of T v. Wiener 78 ATC 4006; (1978) 8 ATR 335 (Wiener's Case), a teacher was required to teach at a minimum of four different schools each day, and comply with a strict timetable that kept her on the move throughout each of these days. Smith J, in the Supreme Court of Western Australia, concluded that travel was inherent in her employment because the nature of the job made travel in the performance of her duties essential.

'Web' of workplaces exists.

If an employee performs work at a single site and then moves to other sites on a regular basis, it would be considered that a 'web' of work places existed. In Wiener's case, the taxpayer was required to attend four to five schools each day. This constituted a 'web' of work places.

TR 95/34 states that although an employee may perform duties at more than one work location, this fact in itself may be insufficient to constitute a 'web' of work places for the purposes of itinerancy. Each work place may be regarded as a regular or fixed place of employment. If the teacher in Wiener's case had attended only one school each day, each school would be regarded as a regular place of employment.

Continual travel from one work site to another.

In certain work situations continual unsettled travel from one workplace to another is a common factor that has emerged from cases as being an indicator of itinerancy. TR 95/34 states that continual travel refers to the frequency with which an employee moves from one work site to another. It is envisaged that the employee regularly works at more than one work site before returning to his or her usual place of residence. If an employee stays at a particular work site for a short period they may still be regarded as engaged in itinerant employment provided their usual pattern of work involves continual travel to more than one work site before returning to their usual place of residence.

In Case T106 86 ATC 1192 (Case T106), a taxpayer employed as an 'off-sider' in the building industry was continuously dispatched to sites at various locations. On any one day it was not unusual for the applicant to attend two sites and he often attended different sites on successive days. The Tribunal agreed that the taxpayer's employment was of an itinerant nature.

Uncertainty as to location of work site.

TR 95/34 states that the element of uncertainty of location is generally another distinct characteristic of itinerant employment. Unlike an ordinary worker who makes the daily journey to his or her regular place of work, the itinerant worker often cannot be certain of the location of their work sites.

The concept of uncertainty was highlighted in Case T106 where the taxpayer was often uncertain about the work site he would be required to attend until the actual day of work. Senior Member Roach said:

He does not work according to any regular pattern as to work site; there is no long-term plan by which he can predict what will be required in the future; and there is no certainty as to the range of work sites he may be called on to attend over a period. In my view his occupation is that of an itinerant worker.

Meals, Accommodation and Incidentals

Generally, accommodation, meal and incidental expenses are private in nature and are not deductible. In Lunney v. FC of T (1958) 100 CLR 478 (Lunney's Case) the Full High Court laid down the principle that for a deduction to be allowable it is not enough for the expenditure to be an essential prerequisite to the derivation of assessable income. In that case it was held that the costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income.

The issue of expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location was considered in FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 (Toms' Case).

In Toms' Case, the taxpayer was a forest worker who during the working week lived in a caravan in a bush camp 108 kilometres from his family home in Grafton. He claimed it was too far to travel each day to his work in the forest, so that it was necessary to establish a caravan at the camp. He would return home on weekends. He claimed the costs of maintaining his caravan and other living expenses such as the cost of heating and lighting. The Federal Court considered that the caravan was rendered necessary as much by the taxpayer's choice of the place of his residence in Grafton as by his choice of employment in the forest, and its purpose was to enable him to retain his residence at Grafton although employed in the forest. It was held that the expenses incurred in relation to the temporary accommodation near the workplace while maintaining a family residence in another location were dictated not by his work but by private considerations, and therefore were not deductible.

Travel between workplaces

Under section 25-100 of the ITAA 1997, if you are an individual, a deduction is allowed where you travel directly between:

• two places of employment

• two places of business, or

• a place of employment and a place of business

and;

• you were engaged in activities to gain or produce your assessable income at your first workplace and the purpose of your travel to your second workplace was gain or produce your assessable income.

However a deduction will not generally be allowed where you:

• do not travel directly from the first workplace to the second workplace

• engage in a private or domestic activity after leaving the first workplace and prior to commencing work at the second workplace

• permanently cease your income earning activities at the first workplace prior to travelling to a second workplace, or

• reside at one of the workplaces.

Question 1

Your case can be distinguished from Wiener's case as we consider that travel is not a fundamental part of your employment. While you do perform your duties at more than one location, you generally travel to only one location in a work day, so it cannot be considered that you have a web of work places or that continuous travel between work sites is a part of your regular duties. There is no degree of uncertainty, as you have an office location at location C and you can perform all stages of your work at this office. None of the other factors that may indicate itinerancy are applicable to your circumstances.

Therefore in view of the above, your employment with tribunal A is not considered itinerant in nature as you travel to only one location to work on any given day. The expenses are incurred to put you in a position to perform the duties of your employment, rather than in the performance of those duties. As such you are not entitled to a deduction for all transport expenses incurred in relation to your employment with tribunal A under section 8-1 of the ITAA 1997.

Question 2

Under subsection 25-100(1), if you are individual, you can deduct a transport expense to the extent that it is incurred in your travel between workplaces. However, under subsection 25-100(3) of the ITAA 1997, travel between two places is not travel between workplaces if one of the places you are travelling between is a place at which you reside. Therefore travelling from your residence location A to location C would not be deductible under 25-100(3) of the ITAA 1997.

Question 3

Under section 25-100(1) of the ITAA 1997 you can deduct transport expenses where you travel directly between workplaces and are earning an assessable income at both workplaces. Therefore transport expenses incurred when travelling from your business at location B to location C, directly and where you are producing assessable income at both workplaces would be deductible under section 25-100 of the ITAA 1997.

Question 4

A deduction would not be allowable for accommodation, meal and incidental expenses you incur, while you stay in accommodation near location C. This is because, as per Lunney's Case, these expenses are incurred in order to put you in a position to be able to earn income but are not incurred in the actual course of gaining or producing that income. And, as per Tom's Case, the expenses are considered to be private in nature as they are incurred due to your choice of where you live and where you work. As the expenses are private in nature they would not be deductible under section 8-1 of the ITAA 1997.

Question 5

Your case can be distinguished from Wiener's case as we consider that travel is not a fundamental part of your employment. While you do perform your duties at more than one location, you generally travel to only one location in a work day, so it cannot be considered that you have a web of work places or that continuous travel between work sites is a part of your regular duties. There is no degree of uncertainty, as you are advised in advance as to which tribunal location you need to attend. None of the other factors that may indicate itinerancy are applicable to your circumstances.

Therefore in view of the above, your employment with tribunal B is not considered itinerant in nature as you travel to only one location to work on any given day. The expenses are incurred to put you in a position to perform the duties of your employment, rather than in the performance of those duties. As such you are not entitled to a deduction for all transport expenses incurred in relation to your employment with tribunal B under section 8-1 of the ITAA 1997.

Question 6

Under subsection 25-100(1), if you are individual, you can deduct a transport expense to the extent that it is incurred in your travel between workplaces. However, under subsection 25-100(3) of the ITAA 1997, travel between two places is not travel between workplaces if one of the places you are travelling between is a place at which you reside. Therefore travelling from your residence at location A to the tribunal location would not be deductible under 25-100(3) of the ITAA 1997.

Question 7

Under section 25-100(1) of the ITAA 1997 you can deduct transport expenses where you travel directly between workplaces and are earning an assessable income at both workplaces. Therefore transport expenses incurred when travelling from your business at location B to the tribunal location, directly and where you are producing assessable income at both workplaces would be deductible under section 25-100 of the ITAA 1997.

Question 8

A deduction would not be allowable for accommodation, meal and incidental expenses you incur, while you stay in accommodation near the tribunal location. This is because, as per Lunney's Case, these expenses are incurred in order to put you in a position to be able to earn income but are not incurred in the actual course of gaining or producing that income. And, as per Tom's Case, the expenses are considered to be private in nature as they are incurred due to your choice of where you live and where you work. As the expenses are private in nature they would not be deductible under section 8-1 of the ITAA 1997.

Question 9

Your case can be distinguished from Wiener's case as we consider that travel is not a fundamental part of your employment. While you do perform your duties at more than one location, you generally travel to only one location in a work day, so it cannot be considered that you have a web of work places or that continuous travel between work sites is a part of your regular duties. There is no degree of uncertainty, as you are advised in advance as to which tribunal location you need to attend. None of the other factors that may indicate itinerancy are applicable to your circumstances.

Therefore in view of the above, your employment with tribunal C is not considered itinerant in nature as you travel to only one location to work on any given day. The expenses are incurred to put you in a position to perform the duties of your employment, rather than in the performance of those duties. As such you are not entitled to a deduction for all transport expenses incurred in relation to your employment with tribunal C under section 8-1 of the ITAA 1997.

Question 10

Under subsection 25-100(1), if you are individual, you can deduct a transport expense to the extent that it is incurred in your travel between workplaces. However, under subsection 25-100(3) of the ITAA 1997, travel between two places is not travel between workplaces if one of the places you are travelling between is a place at which you reside. Therefore travelling from your residence at location A to the tribunal location would not be deductible under 25-100(3) of the ITAA 1997.

Question 11

Under section 25-100(1) of the ITAA 1997 you can deduct transport expenses where you travel directly between workplaces and are earning an assessable income at both workplaces. Therefore transport expenses incurred when travelling from your business at location B to the tribunal location, directly and where you are producing assessable income at both workplaces would be deductible under section 25-100 of the ITAA 1997.

Question 12

A deduction would not be allowable for accommodation, meal and incidental expenses you incur, while you stay in accommodation near the tribunal location. This is because, as per Lunney's Case, these expenses are incurred in order to put you in a position to be able to earn income but are not incurred in the actual course of gaining or producing that income. And, as per Tom's Case, the expenses are considered to be private in nature as they are incurred due to your choice of where you live and where you work. As the expenses are private in nature they would not be deductible under section 8-1 of the ITAA 1997.