Court case opens road for worker travel claims

Townsville Bulletin - - NEWS -

THE re­cent full fed­eral court de­ci­sion in John Hol­land Group Pty Ltd v Com­mis­sioner of Tax­a­tion clar­i­fied an area of leg­is­la­tion that for many may have been con­sid­ered well set­tled law.

The con­cept that travel to and from work is gen­er­ally pri­vate travel re­lies on two old cases called Hay­ley and Lun­ney.

The ba­sic premise was that the em­ploy­ees only com­mence work when they ar­rive there, their choice to live else­where is a per­sonal choice and there­fore the travel ex­penses were not in­curred in the course of the em­ploy­ment but were in­curred to get to work.

Over time there have been a num­ber of cases that qual­i­fied the con­cept fur­ther, but the ba­sic premise re­mained.

Back to the John Hol­land case, which although an FBT case, re­lied on the oth­er­wise de­ductible rule which ba­si­cally is that if the ex­pense was in­curred by the em- ployee and they could have ob­tained a de­duc­tion, then the em­ployer, if in­stead paid the ex­pense, would not be sub­ject to FBT.

The travel ex­penses were flight costs from Perth to the work site and back.

John Hol­land em­ployed work­ers in var­i­ous re­mote lo­ca­tions on a 2 week/ 1 week ros­ter. Ac­com­mo­da­tion on site was pro­vided but not for fam­i­lies. As such al­most all em­ploy­ees based them­selves in Perth.

The em­ploy­ees were paid from when they ar­rived at Perth air­port.

The court found that, as the work­ers com­menced their du­ties at the air­port, and liv­ing away from the site was not gen­er­ally a choice, a de­par­ture from the Hay­ley Lun­ney con­cept was jus­ti­fied.

As such the em­ployee could have claimed the de­duc­tion, if in­curred, and there­fore the em­ployer would not be sub­ject to FBT un­der the oth­er­wise de­ductible rule.

Ex­pect to see fur­ther court cases on the topic as this con­cept is mas­saged to sup­port dif­fer­ent sce­nar­ios to sup­port em­ployee travel claims.

Email David. Hall@ crowe­hor­wath. com. au

This ad­vice is gen­eral in na­ture, the per­sonal opin­ion of the writer; read­ers should seek spe­cial­ist ad­vice be­fore mak­ing de­ci­sions.

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