Edited version of private advice

Authorisation Number: 1052339318380

Date of advice: 4 December 2024

Ruling

Subject: Work related deductions

Question 1

Are you entitled to a deduction for travel, accommodation and parking expenses incurred when staying in location B under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer 1

No.

This ruling applies for the following period:

Year ending XX June 20XX

The scheme commences

XX XXXX 20XX

Relevant facts and circumstances

You have been working at location A since XXXX 20XX.

This was a full-time position with your employer A

In the 20XX income year, you reduced this role down to three days per week to fill a vacant role at location B for the other two days.

This was a new role position.

This role was for a fixed 5-month period XX XXXX to XX XXXX 20XX.

You have now gone back to your original full-time position in location A.

For this new role, you were still employed by the same employer but were paid under a separate payroll ID number with separate payslips. Your employer treated this as a concurrent or separate employment.

However, the total wages paid between the two roles are reported on a single income statement to the ATO.

Your home is in location A, you would travel from your home in location A to location B on Monday morning to perform your new role on Monday and Tuesday.

You would then travel back from location B to your home in location A after work ended on Tuesday to continue your original employment role in location A for the remainder of the working week Wednesday to Friday.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Issue

Work-related travel, accommodation, and parking expenses.

Question

Are you entitled to a deduction for travel, accommodation and parking expenses incurred when staying in location B under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Summary

No, the travel, accommodation and parking expenses are considered private in nature.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all outgoings to the extent to which they are incurred in gaining or producing assessable income or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature.

Trips between home and work

You can't claim trips between your home and place of work, except in limited circumstances.

These trips put you in a position to start work and earn income but are not part of performing your work duties. The cost of these trips is a private expense.

Travelling away from home overnight

You won't be travelling away from home overnight for work if:

•                     because of your personal circumstances, you live a long way from where you work

•                     you're living at a location where you are working

•                     you choose to sleep at or near your workplace rather than returning home.

Expenses you incur in these circumstances are not deductible because you incur them to start earning employment income. They are private expenses.

Application to your circumstances

Based on the information provided, you have taken a second role at a different workplace located in XXX, you made the decision to reduce your working days in XXX to accommodate the new position in XXX.

The new role is with your current employer. On Monday mornings you travel from your home in XXX to your new role at location B, as this is a fixed term role, and it is performed on a regular basis every Monday and Tuesday this is treated as regular employment activity.

While the reason for travel and your income-earning activities are generally related, the travel is of a private nature.

You also made a personal choice to stay overnight, thereby incurring accommodation and parking expenses. Therefore, the travel, accommodation and parking expenses were not incurred as a direct result of gaining or producing assessable income.

You may find the following references from our website ato.gov.au useful:

•                     QC 72130 Overnight travel expenses

•                     QC72122 Trips you can and can't claim

•                     QC72126 Expenses for parking, tolls, accidents, licence and fines

•                     TR 2021/1 Income tax: when are deductions allowed for employees' transport expenses? Paragraphs 33-38 (example 3) and paragraphs 49-50 (example 5)

•                     TR 2021/4 Income tax and fringe benefits tax: employees: accommodation and food and drink expenses, travel allowances, and living-away-from-home allowances

•                     Income Tax Assessment Act 1997 section 8-1