Edited version of your written advice

Authorisation Number: 1051489622907

Date of advice: 6 March 2019

Ruling

Subject: Travel expenses

Question 1

Are you entitled to a deduction for travel expenses between home and work when you work at rural locations?

Answer

No.

Question 2

Are you entitled to a deduction for travel expenses to attend a conference?

Answer

Yes.

This ruling applies for the following period

Year ending 30 June 2019

Year ending 30 June 2020

Year ending 30 June 2021

The scheme commenced on

1 July 2018

Facts

Your employment is based in City A.

At times you cover shifts for other employees in rural areas.

These locations are a considerable distance from your home.

You use your own vehicle to travel to and from these locations.

You carry several days of uniforms in a suitcase, personal protective equipment (PPE) in a work issued sports bag, first aid kit, bedding and a fridge with groceries.

You are paid XX cents per km for mileage and for travel time from your employer.

You receive an allowance that is shown on your payment summary.

You are away from home between X – X days at a time.

For the 2018-19 financial year to date, most of your work has been at rural locations.

You have enrolled to attend a conference in City B.

You will drive to attend the conference.

Your vehicle has a payload of over 1,000kg.

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, or a provision of the ITAA 1997 prevents it.

Travel between home and work

A deduction is generally not allowable for the cost of travel between home and work as it is considered to be a private expense. Also, 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 fact that the travel may be outside normal working hours, or involves a second or subsequent trip, does not change the above principle.

You receive an allowance for your travel to rural locations. However, an employee is not entitled to deduct an expense simply because they receive an allowance, including expenses the allowance is intended to cover. The nature of the expense and its connection to the income producing activities determines whether it is deductible.

Your situation is comparable to supply and relief teachers, relief firemen and relief nurses.

Taxation Ruling TR 95/14 deals with teachers. It states:

156. Supply and relief employee teachers are those employee teachers who are required to replace the regular classroom teacher at various schools at short notice. Generally, the employee teacher will be telephoned at home and asked to attend a particular school for the day. The cost of travelling between home and the various schools is not allowable as a deduction.

157. Even though a relief employee teacher will travel from home to the particular school in response to a telephone call, this does not alter the character of that travel, i.e., it remains private. Home is not considered to be a place of work as the employee teacher's duties commence upon arrival at the school and not on receipt of the telephone call ( Case U112 87 ATC 672).

158. This decision is also supported by the Federal Court in FC of T v. Genys 87 ATC 4875; (1987) 19 ATR 356. This case involved a nursing sister employed at various hospitals through an agency, but who did not travel to more than one hospital each day. Her travel from home to hospital was not allowable.

In Case U97 87 ATC 584, the taxpayer was a relief fireman who was nominally attached to a fire station in a Sydney suburb but was commonly sent to other fire stations in the Sydney fire district ('outer stations'). The Administrative Appeals Tribunal concluded that the taxpayer’s travel between home and work remained private in nature and not deductible.

As with teachers, nurses and firemen that undertake relief work, it is considered that your travel between home and the work locations where you undertake relief work remains private in nature and not deductible.

It is noted that you do stay at the rural locations while working. However, the general principle that travel between home and work is not deductible is still applicable.

It is also noted that you transport some items when you travel to and from work. An exception to the general rule that a deduction is not allowable for travel between home and work is where the travel is considered to be attributable to the transport of bulky work equipment, for example, where a building worker is required to transport large toolboxes to and from their work site because there is no secure storage at the work site.

A case similar to your situation that considered whether the bulky equipment exception would apply is Case 43/94 94 ATC 387; AAT Case 9654 (1994) 29 ATR 1031 (Case 43/94). In that case a flight sergeant with the Royal Australian Air Force was denied a deduction for the cost of transporting his flying suit and other items used for work purposes. These items were carried in:

● a duffle bag measuring 75cm long x 55cm wide x 50cm deep (0.1925 m3) and weighing 20 kilograms when packed,

● a suit bag which weighed 10 kilograms when packed ;and,

● a briefcase sized navigational bag which contained charts, work manuals and study materials.

It was held that the mode of transporting the items was simply a consequence of the means adopted by the taxpayer to convey him to work. It was considered that the duffle bag was not of sufficient size or weight to impede facile transport.

In your case, your fridge, groceries and bedding are not considered to be work equipment. Like in Case 43/94, your other items are not considered to be so bulky that they are difficult to transport. Consequently your travel between home and work does not qualify for the bulky work equipment exception.

Travel to a work related conference

In your case, it is accepted that attending the conference will maintain or improve the skill and knowledge required for you to perform your employment duties. Consequently, the expenses you will incur in order to attend the conference are deductible.

When you drive to City B for the conference, you can only claim the fuel, accommodation, meal and incidental expenses that you incurred while attending the conference and driving directly to and from the venue. If you are staying longer or divert your travel going home for personal reasons, you will need to apportion your expenses accordingly.

In calculating your deduction for your transport expenses in attending the conference you will not be able to use the cents per kilometre method. This is because this method only applies to a car. As your vehicle is designed to carry a load of more than a tonne, it does not meet the definition of a car for the purposes of the cents per kilometre method. Instead you will have to keep your fuel receipts for the trip and claim a deduction for the fuel you use in order to attend the conference.