Edited version of private advice

Authorisation Number: 1051988715867

Date of advice: 9 June 2022

Ruling

Subject: Work related travel expenses

Question

Are you entitled to a deduction for the expenses you incur in travelling between your home and places of work?

Answer

Yes.

The cost of travel between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties (see paragraph 77 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses (TR 95/34)).

However, there are situations where it has been accepted that travel by employees from home to work is deductible. These include:

•         where the taxpayer has to transport, by vehicle, bulky equipment necessary for employment

•         where the taxpayer's employment is inherently of an itinerant nature

•         where the home can be regarded as a base of operations

•         where the taxpayer incurs expenses for travel between two places of business or work.

Home constitutes a base of operations

Whether an employee's home constitutes a base of business operations depends on the nature and the extent of the activities undertaken by the employee at home. An employee's home may constitute a base of business operations if the work is commenced at or before the time of leaving home to travel to work and the responsibility for completing the work is not discharged until the taxpayer attends the worksite (FC of T v. Collings 76 ATC 4254; (1976) 6 ATR 476).

In your case, your work commences before or at the time of leaving your home, not just when you arrive at your workplace. You cannot commence your work on any given day without completing various tasks first.

Your home can be considered as your base of income producing operations.

Therefore, you are entitled to a deduction for travel on the basis of itinerancy, under section 8-1 of the ITAA 1997.

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are a medical professional.

You work at several locations and do not have a regular work location.

You use your home as a starting base to complete certain tasks before you travel to your workplace.

These tasks consist of reviewing notes from your clients' specialists which are usually provided to you the day before, arranging phone calls or video calls to clients and confirming with them that their surgery can proceed.

You cannot commence work without first completing these tasks.

You spend approximately four to five hours a month on these tasks.

You do not generally travel between work locations on the same day.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1