Income tax: Where a taxi driver travels between his/her principal place of residence and the collection point of a taxi, are the costs of travel deductible?

No. The private nature of travel to and from a place of employment is generally well established at law, except in specific circumstances. [see Lunney v . FCT ; Hayley v . FCT 100 C.L.R. 478, 7 AITR 166]

In this instance, the underlying purpose of the travel is to transport the taxi driver to the point where income derivation may occur. As such, the expense is incurred preparatory to, and in anticipation of, the earning of assessable income rather than having been incurred in deriving that income. Accordingly it is not an allowable deduction under sub section 51(1) of the Income Tax Assessment Act ( 1936 ). [see FCT v . Genys 87 ATC 4875, 19 ATR 356]

Bill Jones travels from his home to a place where he collects a taxi cab and commences driving a taxi shift. He collects the taxi cab at 4 o'clock in the morning and no public transport to the place is available.

Notwithstanding the lack of transport and erratic hours of employment [ Case U156 , 87 ATC 908], the travel retains its private character and arises as a consequence of Bill living in one place and commencing work in another, hence any expense incurred in that travel is not deductible.