Edited version of your written advice

Authorisation Number: 1013121796179

Date of advice: 11 November 2016

Ruling

Subject: Work related expenses of an itinerant worker

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 periods

For the year ended 30 June 201X

For the year ended 30 June 201X

The scheme commences on

1 January 201X

Relevant facts and circumstances

Your position is a full time Attendant

You travel to various facilities in order to cover or provide relief services for the permanently stationed Attendant or similar when they are on leave. This requires a minimum of one week.

You are required by your employer to travel around in order to work.

Your residential place is not near your place of work.

Accommodation is provided by your employer at the relevant facility when directed by your employer to provide relief services.

You are required to use your own car to travel between the regional sites and facilities.

Your employer pays a mileage allowance for travel between any of the sites and facilities.

Your employer also pays an equivalent mileage allowance for travel between facilities.

You return to your residential place in between placements.

You take annual leave entitlements when there are no placement requests.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

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 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, and

● 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 (TR 95/34) 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 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 placed 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 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 of your travel based on a co-ordinated program of relief. Each facility 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.