Claiming Travel Between Home & Work
Over the years one of the most commonly asked questions from clients is, ‘can I claim the cost of travel from home to work’? Generally speaking, individuals travelling from home to their workplace cannot claim a deduction because the travel is classified as a private expense. However, you may be able claim travel expenses between home, your regular place of work or your alternative workplace but such claims can be a minefield for individuals. To assist you with some guidelines we have outlined what does and doesn’t constitute deductible travel between home and the workplace.
Travel costs may generally be claimed when travelling:
- Directly between two places of work (i.e. for a second job).
- From home to an alternative work site for work purposes (e.g. a client’s premises) and back to home or back to your normal place of work.
- From your normal workplace to an alternative workplace and back to home or back to your normal workplace.
- When your home is your base of employment (see Note A below) and you start work at home, then travel to a workplace where you continue working for the same employer.
- Between shifting places of employment for itinerant work (see Note B below) where you regularly work at more than one workplace before returning home each day.
- Where you are required to carry bulky or heavy tools or equipment that you use for work and can’t leave at your workplace (e.g. a double bass for a musician or a heavy power tools for a tradesperson).
A - For individuals, your home can only be counted as a workplace if you carry out ‘itinerant work’ - that is, work that requires travelling from place to place.
B - Factors which would indicate your work is itinerant would be:
- The very nature of your work involves travel between various work sites and is fundamental to the role, not just because it may be convenient for you or your employer.
- You have a network of workplaces you travel to throughout the day.
- You are continuously travelling between work sites.
- Your home is the base of your operations – you start work at home and cannot complete it until you attend at your work site.
- You often don’t know where your work sites for the day may be.
- Your employer provides a travel allowance in recognition of your requirement to travel continually between work sites and this allowance pays for the travel.
Examples of these types of itinerant workers would include sales representatives, trades people, commercial travellers or Government inspectors whose homes are their base of operations from which they travel to a number of workplaces throughout the day over an extended period of time. They may typically appear at the employer’s workplace periodically (once a week for example) to file reports, organise new assignments or pick up supplies. Travel from home to the office in these limited circumstances would be treated as business travel and therefore claimable.
What’s Not Claimable
Below is a list of common misunderstandings of claimable travel:
- Travel for minor work-related tasks such as picking up or posting the mail on the way to or from work.
- Driving between home and the workplace more than once a day.
- Being on call and your employer contacts you at home to come into work.
- Shift work or overtime outside normal business hours.
- Your home is your base for your own business and you travel directly to a place of work where you are an employee.
- Some of your work is performed at home.
The rules are quite complex and we encourage you to consult with us regarding your specific travel queries.
Click HERE to download the full edition of The Business Accelerator Magazine for June 2014.
Other articles in this edition:
- 2014 Individual Tax Return Checklist
- 2014 Companies, Partnerships, Trusts & Other Business Tax Checklist
- 2014 Budget Overview
- Personal Taxation - 2014
- Budget Changes For Business
- Superannuation & Retirement Changes
- Business Start Up Corner - Thinking Of Starting A Business?
- ATO & Superannuation
- Where There's A Will...
- What's A Business Worth?
- Why Your Business Needs To Be Google Friendly
- Mobile Money
- Reading Corner - The E-Myth Revisted
- One Stop Shops For Social Media
- Tech Corner - Parking Maestro
- A Minute On Marketing - 7 Killer Marketing Words