Edited version of your written advice

Authorisation Number: 1013009082623

Date of advice: 9 May 2016

Ruling

Subject: Work related travel expenses

Question 1

Are you entitled to a deduction for the expenses you incur travelling between home and work as a result of your employment as a relief teacher?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 2016

The scheme commences on:

1 July 2015

Relevant facts and circumstances

You work as a relief teacher.

You have to travel to various schools, as requested, to provide service.

You only work at one school per day.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 paragraph 8-1(2)(d)

Reasons for decision

Summary

You are not entitled to a deduction for your travel as your home doesn't constitute a place of business, you are not an itinerant worker and you do not transport bulky equipment.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 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 in nature.

Travel between home and work

Taxation Ruling TR 95/34 discusses the deductibility of travel expenses.

Paragraph 77 of TR 95/34 states:

A deduction is generally not allowable for the cost of transport by an employee between home and his or her normal work place as it is generally considered to be a private expense. The cost of travelling between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties. 

However the cost of travel between home and work may be allowable in certain situations where:

• The employee's home constitutes a base of employment and travel is between two places of employment;

• The employee's work is inherently of an itinerant nature;

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

Home as a base of operations

Travel expenses are deductible where an employee travels between home based employment and another place of employment. However, the fact that the employee chooses to perform work at home associated with employment conducted elsewhere is not sufficient for the home to constitute as a base of operations.

Paragraph 56 of TR 95/34 states that an employee's home may constitute a base of operations if the work is commenced at or before the time of leaving home to travel to work and the responsibility for completing it is not discharged until the taxpayer attends at the work site. Whether an employee's home constitutes a base of operations depends on the nature and the extent of the activities undertaken by the employee at home. 

In the Federal Court Case FC of T v. Collings 76 ATC 4254; (1976) 6 ATR 476 it was held that the taxpayer, a computer consultant was allowed the expenses of travel between home and work as;

a) she had commenced performance of her duties before leaving home and travelled to work to complete those duties.  Her obligation was more than just being on stand-by duty at home; and

b) she did not choose to do part of the work in two separate places.  The two places of work were a necessary obligation arising from the nature of the special duties of her employment.

As an employee teacher your duties do not commence until you reach the school. Although you may take home work from the schools, it is not a necessary obligation arising from the duties of your employment that you carry out work at home. Accordingly your home is not considered as a base of employment.

Itinerant work

The question of whether an employee 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. The main features of itinerant work specified in TR 95/34 include:

• Travel is a fundamental part of the employee's 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).

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 ('web' of work places) each day, and comply with a strict timetable that kept her on the move throughout each of these days. The Supreme Court of Western Australia concluded that travel was inherent in her employment because the nature of the job itself made travel in the performance of her duties essential. It was a necessary element of her employment that on those working days transport be available at whichever school she commenced her duties and remained at her disposal throughout each of those days.

In contrast to Wiener's case, you are not required to travel between a 'web' of work places on a daily basis. You are notified on the day as to which school you will be located at and you will remain at that school for the day once you arrive. Each school would be regarded as a regular place of employment and travel is not a fundamental part of your work. Therefore you cannot be considered as an itinerant worker.

Transport of bulky equipment

Paragraph 62 of TR 95/34 states that a deduction may be allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work.  If the equipment is transported to and from work by the employee as a matter of convenience or personal choice, it is considered that the transport costs are private and no deduction is allowable. Paragraph 138 of Taxation Ruling TR 95/14 specifies that an employee teacher is not entitled to a deduction for transport costs if, as a matter of convenience, work is performed at home and items such as papers, books and material (whether bulky or not) are transported between home and work for that purpose. In Case Q1 83 ATC 1; (1983) 26 CTBR (NS) Case 65, the use of a car by a school principal in these circumstances was treated as private use as it was travel from home to the place of employment.

In view of the above, you do not satisfy the requirements specified in TR 95/34 for travel expenses between home and work to be deductible. Your home does not constitute a base of employment, you are not engaged in itinerant work and your transport costs are not attributed to the transportation of bulky equipment. Therefore you are not entitled to claim a deduction for the travel expenses between your home and work under section 8-1 of the ITAA 1997.