Edited version of your written advice

Authorisation Number: 1051418890948

Date of advice: 21 August 2018

Ruling

Subject: Work related car expenses

Question

Are you entitled to claim a deduction for the travel between your home and work sites and back home?

Answer

No

This ruling applies for the following period(s)

1 July 2017 to 30 June 2019

The scheme commences on

1 July 2017

Relevant facts and circumstances

You have been casually employed as a supervisor since early 2018.

Your employer is based in A.

You are employed to work to on shut-downs at three different sites.

Those employees who live in the A region take company vehicles to the work sites. These employees are also paid an hourly rate for the time it takes to drive from A to the work site.

You live in B, which is a X hour drive away from A.

You believe that it doesn’t make logical sense for you to drive X hours to A in your personal motor vehicle and then drive to the work sites with the other employees in the company vehicles.

You choose to drive your personal vehicle from B to the work site you will be working at, rather than driving to A and then taking the company vehicles to the work site to remove the extra amount of travel required.

You do not receive an allowance from your employers to cover any of your motor vehicle costs.

You work at X regular work sites on an unstructured routine. The lengths of the shut-downs vary between a few days to a couple of weeks.

Sometimes you are required to travel to another work site directly after completing a shut-down, but more often than not you return to B between jobs. You do not begin work immediately upon arriving at the next work site.

Due to being employed casually and having no structured roster, there may be a number weeks in between shut-downs that you are required to work.

You do not carry bulky tools in your vehicle and whilst on the work site you have access to a company vehicle.

You have advised that you may occasionally do procedural work at your home for your supervisory role the night before you leave to go to a work site.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

You are not entitled to claim a deduction for the expenses you incur to travel between your home and work sites and back home as the travel is considered to be private in nature.

Detailed reasoning

Section 8-1 of the 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.

Generally, expenditure in travelling between a taxpayer's home and place of work is of a private nature and is accordingly excluded as a deduction under section 8-1 of the ITAA 1997. Only in special circumstances is such travel deductible.

Taxation Ruling IT 2543 describes the special circumstances where travel from home to work is deductible. These situations are as follows:

● the taxpayer's home constitutes a place of employment and travel is between two places of employment or business

● the taxpayer's employment can be construed as having commenced before or at the time of leaving home

● the taxpayer has to transport by vehicle bulky equipment necessary for employment

● the taxpayer's employment is inherently of an itinerant nature

● the taxpayer is required to break his or her normal journey to perform employment duties (other than including incidental duties such as collecting newspapers, mail, etcetera.) on the way from home to the usual place of employment, or from the place of employment to

home.

Your home as a place of employment

A deduction is not allowable for the cost of travel between a person’s home at which an income producing activity is carried on and a place of other employment unless there is some aspect of the travel that is directly related to the employment activity.

The circumstances where part of a home is considered to have the character of a place of employment can be contrasted with the more common case where a taxpayer maintains an office or study at home as a matter of convenience (for example, so that he or she can carry out work at home which would otherwise be done at his or her regular place of business or employment).

We do not consider that your home is a place of employment as the actual employment is conducted elsewhere.

Employment commencing before or at the time of leaving home

A deduction may be allowed for travel between you home and place of work where the employment is commenced before or at the time of leaving home.

In your case, your work does not commence before you leave your home or at the time of leaving.

Itinerancy

Taxation Ruling TR 95/34 further discusses when an employee’s work is itinerant. The question of whether an employee's 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. Further, itinerant work may be a permanent or temporary feature of an employee's duties.

The main features of itinerant work include:

● travel is a fundamental part of the employee’s work.

● the existence of a web of work places in the employees 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 existence of the above characteristics would not necessarily be determinative, but would be a strong indication that an employee is engaged in itinerant work. It is considered that no single factor on its own is necessarily decisive.

You have a regular workplace web from where you carry your employment activities. You do not continuously work at more than one work site before returning home.

Application to your circumstances

In your case, your home is not a place of employment, your employment does not commence before you leave home, you are not transporting bulky equipment and your employment is not itinerant. Therefore, your home to work and back home travel is not deductible.