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Travel and accommodation costs #2 – Travel from home to work

We always start with the position that travel between home and work is not deductible… And then the arguments begin.

So, to end these arguments, the Commissioner states in TR 2021/1 Income tax: when are deductions allowed for employees’ transport expenses? that the usual position that the cost of travel between home and the employee’s regular place of work is not deductible does not change merely because:

  • The employee’s home is very distant from their regular place of work (we will come to this in another blog)
  • The employee needs to travel to and from their regular place of work more than once a day. For example, a teacher who drives to school after hours to attend parent-teacher interviews
  • The location of the employee’s home or their regular place of work limits the choices of travel, for instance if no public transport is available, or their regular place of work can only be reached by a particular mode of transport such as a boat
  • The employee receives an allowance related to travel
  • The employee works overtime or works shift hours that begin or end during the night. For example, a nurse who works night shift and drives to their regular place of work because there is no public transport available at the time they start work
  • The employee stops en route to their regular place of work to fulfil an incidental work task. For example, a dentist calling into a dental laboratory to collect dentures on their way to the surgery or a secretary collecting newspapers or mail on their way to the office.

But I do heaps of work on the train while travelling to work so it must be deductible. Have a look at this example:

Mischa is a public servant who works in Geelong. She lives 30 kilometres from the office and travels between home and work by train. Mischa frequently checks her work emails at home on her work phone and sometimes chooses to do some work tasks before she leaves for work, or after she gets home from work. While on the train travelling to work, Mischa sometimes uses her work phone to respond to work emails and texts and make work-related phone calls… Mischa is not entitled to a deduction for her travel.

But I have two offices so travel to one must be deductible. Have a look at this example:

Aisha works for a retail company. Under the terms of her employment contract she works on a Monday, Thursday and Friday at a store located in a suburban shopping centre and on a Tuesday and Wednesday at a store of the same employer in a different suburb of the same city. Aisha is not entitled to a deduction for the cost of her travel between home and the stores at either location. 

Finally, it might start looking like deductible travel but end as just travel to a regular place of work and not be deductible. Last example for this blog:

Raj is an accountant who lives and works on the Gold Coast. Raj’s employer requires him to work at their Brisbane city office (one hour’s travel from home) while another employee is on five months’ long service leave… Having regard to the broader nature of the arrangement, it is considered that the transport expenses incurred by Raj in travelling between his home and the employer’s Brisbane city office are ‘home to a regular place of work’.  If Raj was required to replace another employee in the Brisbane office for a shorter period, say three months or less, it may be arguable in light of the shorter duration of the working arrangement that the Brisbane office has not become a regular place of work during that period. 

What about my bulky equipment? To be able to claim a deduction for home to work travel due to transporting bulky equipment, it is necessary that:

  • the equipment is essential for the performance of the employee’s employment duties
  • the equipment is bulky such that transportation by car or other private vehicle is the only realistic option, and
  • transporting the items to and from their regular place of work is a practical necessity because there is no secure area for the storage of the equipment provided at the employee’s regular place of work or the equipment needs to be transported to a different site each day.

However, if equipment is transported by the employee as a matter of mere convenience or personal choice, the transport costs are private and no deduction is allowable.

Summary… travel between work and home is almost always non deductible…

By Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.

2 replies on “Travel and accommodation costs #2 – Travel from home to work”

So what happens when Raj replaces a colleague for say 2 months, but due to illness (or some other unknown factor) the colleague then extends their absence for another 2, 3, 4 months etc (taking us over the 3 months mentioned)? 🙂

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I think these are two arrangements. The first, before the extension, was traveling for work to a place that was not one of his regular places of work – so deductible. But when the illness/extension occurred, a second arrangement was created and this would not be deductible. But evidencing this is going to be very important

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