Edited version of private advice

Authorisation Number: 1052026740669

Date of advice: 29 August 2022

Ruling

Subject: Work related travel expenses

Question

Are you entitled to a deduction for the travel expenses you incur while travelling for work?

Answer

Yes.

You are entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 for expenses incurred in gaining or producing your assessable income. However, you are not able to deduct a loss or outgoing that is private or domestic in nature.

According to Taxation Ruling TR 2021/1 transport expenses may be deductable if:

•                    the travel fits within the duties of employment, that is, the obligation to incur transport expenses arises out of the employment itself and not the employee's personal circumstances

•                    the travel is relevant to the practical demands of carrying out the employee's work duties or role, that is, the transport expenses are a necessary consequence of the employee's income-producing activity.

Paragraph 55 of TR 2021/1 states that overnight travel is not attributed to personal choice if you work at a location in the same area as your residence and another that requires an overnight stay.

For travel expenses, such as accommodation and food and drink, Taxation Ruling TR 2021/4 paragraphs 33 to 35 outline that travel expenses are deductable where they are not attributed to personal choice.

You are entitled to a deduction for the travel expenses resulting from your travel to attend the furthest region as it is an incident of your employment. The travel is not a result of personal choice because your residence is in the same region as your other regular work locations.

This ruling applies for the following periods:

Year ended 30 June 2022

Year ending 30 June 2023

Year ending 30 June 2024

The scheme commences on:

1 July 2021

Relevant facts and circumstances

From mid-20XX, you have taken on an ongoing position of Regional Operations Manager with your employer for work locations in two different regions.

You reside in in one of these regions.

This role includes a car allowance.

You don't have one regular place of work.

You describe the nature of your employment as transient and it is the role as a whole that is transient, rather than the activities on a daily basis.

The role requires you to travel between the two regions, typically on a two-week rotation. However, there is flexibility where operational issues may arise. In this case you will reside in one location for longer as necessary.

In each region there are multiple sites that you work from.

You pay for all travel expenses to the furthest work locations. None of these are reimbursed by your employer.

The expenses you are requesting to claim are:

•                    Return flights, car rental and associated expenses, short term accommodation such as hotels, and meals while in the second region.

You have the receipts for all travel expenses incurred and you have maintained a logbook detailing car travel.

Relevant legislative provisions

Income Tax Assessment Act section 8-1