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Edited version of your written advice
Authorisation Number: 1051424917430
Date of advice: 4 September 2018
Ruling
Subject: Work related expenses
Question 1
Are you entitled to a deduction for airfares interstate?
Answer
No
Question 2
Are you entitled to a deduction for taxi fares?
Answer
No
Question 3
Are you entitled to a deduction for your meals?
Answer
No
Question 4
Are you entitled to a deduction for the hiring of a chaperone?
Answer
Yes
Question 5
Are you entitled to a deduction for car expenses?
Answer
Yes
This ruling applies for the following periods:
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You are a professional working in State A.
You work during weekend’s interstate in State B.
You leave work at the State A on a Friday afternoon and get a taxi to the airport for a flight to State B.
When you arrive in State B you take a taxi to your home in State B and get your car which is housed at your home in State B and commence your work.
You do not work on Saturday.
You commence work on Sunday using your own car.
On Monday morning you get a taxi to the airport for a flight back to State A to resume your work.
You hire a Chaperone to assist your work in State B and the chaperone drives you around and does some admin work for you.
You purchase pre made meals and food to prepare your meals while in State B from Friday night to Monday morning.
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, or relate to the earning of exempt income.
Airfares, Taxi fares and meals
Travel expenses from home to work are generally not an allowable deduction. The leading case that decided this was the decision of the Full High Court in Lunney v FCT (1958) 7 AITR 166. The reasons are twofold.
Firstly, merely because certain expenditure must be incurred in order to be able to derive assessable income, in that unless one arrives at work it is not possible to derive income, does not necessarily mean that the expenditure is incidental and relevant to the derivation of assessable income or that it was necessarily incurred in the course of gaining or producing assessable income. It is a prerequisite to the earning of assessable income rather than being incurred in the course of gaining that income. Hence, it does not fulfil the positive limbs of section 8-1 of the ITAA 1997.
The second reason is that the essential character of the expenditure is of a private or domestic nature, relating to the personal and living expenses as part of the taxpayer’s choice of where to live, in choosing to live away from and at what distance from work. The negative limbs of section 8-1 of the ITAA 1997 are therefore also breached.
The policy of the Commissioner of Taxation is to allow a deduction where all the particular facts which give rise to a deduction in Vogt 75 ATC 4073; Collings 76 ATC 4254; Ballesty 77 ATC 4181 or Wiener 78 ATC 4006 are present. The general policy is that the expenses of travel between home and work are not deductible are contained in Taxation Ruling 2107/D6.
The facts of this case are comparable with Lunney and Hayley in that for people pursuing a profession, expenses of travelling in habitually going from home to a regular place of employment are not deductible.
In your case the airfares between your home and State B along with the taxi fares and meals are private and domestic in nature.
The job in State B is not connected to your work in State A therefore the expenses you incur in travelling to State B to work are incurred to put you in a position to carry out the work in State B.
The meals are private and domestic as you would be consuming food if you were at home in State A.
Chaperone and car expenses
A deduction is allowable under section 8-1 of the ITA 1997 for the chaperone and car expenses as the chaperone is engaged to drive you for your work and undertake some administrative duties for you. You use your own car to travel while working in State B.
Accordingly, you are not entitled to a deduction for airfares, taxi fares and meals during your weekend work in State B under section 8-1 of the ITAA 1997.
You are entitled to a deduction for the costs associated with the chaperone and the use of your car.