Travel expenses: Home To Work Flights (Mine Site)

Whether a fly-in fly-out mine-site employee is entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 for the part of home to work travel which is not paid for by the employer.

In this case the taxpayer is travelling to work and the expenditure incurred is not an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997.

The taxpayer is employed at a remote Australian mine-site and works on a two week on, one week off, fly-in fly-out basis. The employer pays for the travel between the mine-site and the capital city of the State in which the taxpayer lives. The employer does not pay for travel between that capital city and the taxpayer's home, which is a considerable distance away.

Section 8-1 of the Income Tax Assessment Act 1997 generally allows a deduction for any loss or outgoing to the extent that it is incurred in gaining or producing assessable income.

It is settled law that expenses of travelling to work are not deductible as they are not incurred in gaining the assessable income, but as a pre-requisite to gaining assessable income ( Lunney v FC of T ; Hayley v FC of T (1958) 100 CLR 478).

In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel that the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194).

In this case the taxpayer is travelling to work and the expenditure incurred is not an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997. It should be noted that the significant distance travelled is irrelevant as the law does not differentiate between, nor apply on the basis of, distances travelled.