Edited version of private advice

Authorisation Number: 1052309004193

Date of advice: 24 September 2024

Ruling

Subject: Income tax - travel

Question 1

Are you entitled to claim a deduction for your expenses for travelling between home and work under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

No. Taxation Ruling TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses? explains when an employee can deduct the cost of travel under section 8-1 of the ITAA 1997. With limited exceptions, an employee's costs of travelling between home and a regular place of work are not deductible. Such costs are not incurred in the course of gaining or producing an employee's assessable income. This expenditure is regarded as a prerequisite to earning an employee's assessable income. They are explained by where the employee lives in relation to where they report for work. Further, transport expenses incurred in travelling between an employee's home and their regular place of employment are private in nature. An employee cannot deduct travel expenses they have incurred where, due to their personal circumstances, they live far away from where they gain or produce their assessable income. These expenses are living expenses and are not deductible.

In your case, you are employed with XXXX. You live in XXXX. Your point of hire is XXXX and your work location is XXXX. Your employer provides flights to your work location, but you choose to drive your own car. Transport expenses incurred in travelling between an employee's home and their regular place of employment are private in nature.

Therefore, you are not entitled to claim a deduction for your expenses for travelling between home and work under section 8-1 of the ITAA 1997. The occasion of the outgoing (travel expenses) is not related to your income earning activities but rather your personal circumstances of where you live.

Question 2

Are you entitled to claim a deduction for your expenses for travelling between different work sites under section 8-1 of the ITAA 1997?

Answer 2

Yes. You can claim a deduction for the cost of transport to travel between different work sites. The following paragraphs of TR 2021/1 apply:

Travelling between work locations that do not include the employee's home:

39. In contrast to transport expenses between home and a regular place of work, expenses of travelling between work locations, neither of which is the employee's home, are ordinarily deductible provided that the employment is the occasion for the expenses. This includes different workplaces of the same employer, clients of the employer and other locations where the employee carries out their employment duties (for example, a court of law or at a client's work site). Where travel is between work locations of different employers or different income-producing activities, section 25-100 applies.

40. Where, for example, an employee is required to travel from their regular place of work to attend a meeting at another office of their employer, the outgoings for transport for travel between the workplaces, occasioned by the employee's employment duties and the factors outlined in paragraphs 16 and 17 of this Ruling, support the characterisation of the transport expense being incurred in producing assessable income as:

the travel fits within the duties of employment

the travel is relevant to the practical demands of carrying out the employee's work duties

the employer generally asks for the travel to be undertaken

the travel would occur on work time, and

the employee is under the direction and control of their employer.

In your case, your point of hire is XXXX and your work location is XXXX. On occasions you are required to travel from XXXX to different work site, including XXXX and XXXX. Therefore, you can claim a tax deduction for the cost of transport to travel between these different work sites.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commenced on:

1 July 202X

Relevant facts and circumstances

You are employed with XXXX.

You live in XXXX. Your point of hire is XXXX and your work location is XXXX.

Your employer provides flights from XXXX to your work location, but you choose to drive your own car.

On occasions you are required to travel from your work location to different work sites, including XXXX and XXXX. You drive your car to these work sites.

You keep a logbook of your travel.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1