Edited version of your written advice

Authorisation Number: 1013124532100

NOTICE

The private ruling on which this edited version is based has been overturned on objection.

This notice must not be taken to imply anything about the correctness of other edited versions.

Edited versions cannot be relied upon as precedent or used for determining how the ATO will apply the law in other cases.

Date of advice: 15 November 2016

Ruling

Subject: Itinerant Worker - WRE - Deductions - Travel Expenses

Question 1

Is the travel between home and work deductible for the taxpayer because you would be classified as an itinerant worker?

Answer

No

Question 2

Is the travel between home and work deductible for the taxpayer because your home would be classified as your base of employment?

Answer

No

Question 3

Are the travel costs (motor vehicle, accommodation and food expenses) incurred by the taxpayer when travelling to other cities in the course of your services deductible?

Answer

No.

This ruling applies for the following periods:

Year ended June 30 20YY

Year ending June 30 20ZZ

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You provide relief services as a casual employee.

You have placed your name on employment registers with specific employers in order to obtain relief opportunities.

You do not have a dedicated place of employment and do not have a regular work pattern as you are providing relief services when casual employment opportunities are offered.

You have the ability to accept or reject any offer of employment received. Notification of future employment can take the form of a phone call, text, or email on the morning relief work is required or prior notice several weeks from the future date. The type of employment support can be unknown and can vary.

You have accepted offers of employment at various facilities, as requested, that have required you to travel. The length of requested service can be from half a day to more than one week.

Your employer does not provide you with a travel allowance. They have not provided you with a duty statement or letter supporting your requirement to utilise your own car in the course of your employment.

You have worked 2 or 3 days per week for various facilities in the current financial year. On a number of occasions you were requested to travel between facilities within a single day.

You do not have documentation that requires you to supply your own equipment. Employers that you work for provide resources for your use; you supplement these with private materials.

You receive some material reimbursement from the employer upon provision of receipts. The materials then become the property of the employer.

You are required on occasions to travel to facilities in the course of your duties. You work with a number of clients. The facilities provide basic resources these are supplemented by you. You also supply other resources on an as needed basis.

You have worked for one, two week period. During this period you travelled to the work site on the Monday and returned home on the Friday afternoon. You have completed return trips to the work site in a single day when an employment offer has been made.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

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 continual daily basis. You are notified on the day of employment, as to which work site you will be located at and you remain at that work site for the day once you arrive. Each work site would be regarded as a regular place of employment and travel is not a fundamental part of your work.  On three occasions you have been required to travel to a second work site however this is not a regular pattern of your employment. Therefore you cannot be considered as an itinerant worker.

On the days after commencing your duties, where you are required to travel to a different work site it is considered you are travelling on work rather than to work. This travel is undertaken in the performance of your duties. Therefore where you finish work at one work site and travel directly to the next work site in order to continue your work with your employer, you will be entitled to claim a deduction for your travel expenses for this portion of your journey.

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;

● 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

● 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 a casual employee your duties do not commence until you reach the requesting work site.  Accordingly your home is not considered as a base of employment. You can accept or reject any offer of employment, made by the various employers, which have your availability to be called in, recoded on their employment registers.

Transport of bulky equipment

In Reany v's The Commissioner of Taxation [2016] AATA 672 (Reany), the issue of personal choice was raised when considering whether an expense incurred by the taxpayer was deductible under section 8-1 of the ITAA 1997.

In Reany, the taxpayer wished (amongst other expenses) to include as a deduction travel expenses that were incurred transporting his tools and equipment between his place of residence and place of employment. The taxpayer argued that while his employer provided some of the tools required to perform his employment duties, most of the tools were provided by the taxpayer. This was to ensure that they were decent quality items, which is not always the case with those provided by his employer. Further, as these tools were bulky in nature and he was unconvinced that the storage facilities provided by his employer at his place of employment were adequate they were required to be transported by vehicle between his place of residence and his place of employment on a daily basis.

While the AAT found some inconsistency between the evidence of the taxpayer and that of the taxpayer's employer, the AAT found in favour of the Commissioner of Taxation and the taxpayer's deduction was denied. Significant in reaching this decision was that the AAT found that it was a personal choice excised by the taxpayer to use his own tools, as the majority of the tools were provided by the taxpayer's employer. Further it was once again a personal choice that the taxpayer exercised to transport his tools and equipment between his place of residence and his place of employment, as his employer provided sufficient facilities for his tools and equipment to be stored. As a result of the taxpayer exercising these personal choices, the expenses incurred were found to be private in nature, and therefore no deduction was allowable under section 8-1 of the ITAA 1997.

Your situation is similar to the situation in Reany. It is acknowledged that the nature of your employment requires you to be confident in the equipment that you are required to use to carry out your employment duties. However, the issue of whether equipment provided by an employer is of sufficient quality for an employee to perform their income producing activities is required to be resolved between the employer and employee. In using your own equipment you are exercising a personal choice not to use the equipment provided by your employer. Consistent with the principles established in Reany the use of your personal equipment is private in nature.

You do not have documentation from the employer that requires you to supply your own equipment. The work sites that you work at do provide resources for your use; you supplement these with private materials. Consequently the equipment that is transported to and from work is a matter of convenience and personal choice, it is considered that the transport costs are private and no deduction is allowable under section 8-1 of the ITAA 1997.

Work related deductions

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for losses and outgoings to the extent to which they are incurred in gaining or producing assessable income. However, no deduction is allowed for expenses to the extent to which they are of a capital, private or domestic nature.

Taxation Ruling TR 95/14 addresses the issue of work related deductions for employee teachers. The ruling states in relation to travel between home and work that a deduction is not allowable for the cost of travel by an employee teacher between home and his or her normal work place as it is generally considered to be a private expense. The character of the travel does not change for supply and relief teachers or teachers 'on call', that is, the travel remains private.

There are circumstances where a teacher may be allowed a deduction for home to work travel, for example, when transporting bulky equipment. A deduction may be allowable if the motor vehicle expenses can be attributed to the transportation of bulky equipment rather than to private travel between home and work. (See FCT v Vogt 75 ATC 4073; 5 ATR 274).

In Hill v FC of T 2016 ATC 10-430 Senior Member G Lazanas considered work-related travel expenses and car expenses in a relevant year. The following judgment was made in relation to itinerant work. Mr Hill's duties did not involve him travelling from workplace to workplace as is essential for itinerancy. Mr Hill had made a lifestyle choice to work in regional towns and live in his motorhome. Mr Hill was not required to travel different locations in the course of his employment and, therefore, he did not have a 'web' of workplaces. Rather, he chose to travel from his home to undertake work in different locations. At the end of each discrete employment arrangement, he returned to his home for a period of time. While he performed duties at more than one work location (when looking at the entirety of his separate employment arrangements) in the relevant year, this fact in itself is insufficient to constitute a 'web' of workplaces for the purpose of itinerancy. They constituted consecutive work locations as Mr Hill was exclusively employed by one employer and reporting to one work location, at any point in time. Therefore, each work place may be regarded as a regular or fixed place of employment, even if there was some uncertainty about the length of time that he would be employed at each location because of the seasonal nature of work.”

In Barrett v Commissioner of Taxation [2000] AATA 184, concerned a taxpayer that was a carpenter, who had four different employers during four discrete periods, in a single year. In that case, the taxpayer's home was 640 kilometres from Sydney and he would travel to Sydney for work and return home once every two months. The Tribunal was not satisfied that the taxpayer's expenses on accommodation and meals were deductible because the taxpayer chose to work in Sydney, none of his employers required him to live away from his usual place of residence to work and, furthermore, none of the employers paid him an allowance.”

In your case, your travel between home and work is considered to be private in nature. You choose to accept employment at different locations. You are not in receipt of any travel allowance. You have not been provided with a duty statement or letter supporting your requirement to utilise your own car in the course of your employment. The travel expenses are a prerequisite to the earning of assessable income, and are not incurred in the course of gaining or producing your assessable income. The distance between your home and work does not change the character of your travel. You choose to remain in location for an extended period incurring costs for accommodation and food. As such, no deductions in respect of these costs are an allowable. Accordingly your travel expenses from home to work in another city are not deductible.