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 under subsection 51(1) of the Income Tax Assessment Act 1936 ?

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. FC of T; Hayley v. FC of T 100 C.L.R. 478]

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 subsection 51(1). [See FC of T v Genys 87 ATC 4875; (1987) 19 ATR 356] Example: Bill Jones travels from his home to a place where he collects a taxi cab and commences driving a taxi shift. The meeting takes place at 4 o'clock in the morning and no public transport 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.