TAXATION - application for review of an objection decision - 2021 income year - COVID 19 restrictions in Melbourne, Victoria - taxpayer employed by the Australian Broadcasting Corporation (ABC) - restrictions imposed by the Victorian government and Applicant's employer - taxpayer's employment consisted of two roles - objection to deduction in occupation expenses - deduction of expenses incurred in gaining or producing assessable income - proportion of rent on residential property referable to home office to perform role - whether essential characteristics of expenditure incurred in gaining assessable income - use of the premises - whether incurring of the expenditure was done as a matter of convenience to the taxpayer - whether particular types of expenditure can be only personal or domestic in nature - taxpayer unable to work outside apartment - taxpayer unable to work elsewhere in apartment - deduction for occupation expenses allowed - objection to deduction of car expenses - cents per kilometre method - reasonable estimate of business kilometres - travel between workplaces - whether travel was incurred in the course of deriving assessable income - whether travel was incurred for the purpose of deriving assessable income - deduction for car expenses allowed - decision of the Commissioner is set aside and remitted

Administrative Appeals Tribunal Act 1975 (Cth) s 37

Administrative Review Tribunal Act 2024 (Cth) s 23

Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth), Schedule 16 Part 5 section 24

Income Tax Assessment Act 1997 (Cth) ss 8-1, 25-100, 28-10, 28-12, 28-13, 28-15, 28-15, 28-25, 25-100

Income Tax Assessment Act 1997 - Cents per Kilometre Deduction Rate for Car Expenses 2020 (Cth)

Public Health and Wellbeing Act 2008 (Vic) ss 198(1) and 200

Taxation Administration Act (Cth) s 14ZZK(b)(i)

Bosanac v Commissioner of Taxation (2019) ALJR 1327; [2019] HCA 41

Caffrey v Commissioner of Taxation (1973) 21 FLR 427; (1975) 73 ATC 4144; (1973) 4 ATR 109

Commissioner of Taxation v Anstis (2010) 241 CLR 443; (2010) 85 ALJR 122; (2010) 76 ATR 735; [2010] HCA 40

Commissioner of Taxation v Collings (1976) 10 ALR 475; (1976) 76 ATC 4254; (1976) 6 ATR 476

Commissioner of Taxation v Cooper [1991] FCA 190; (1991) 29 FCR 177, 189, 201; [1991] FCA 190; (1991) 99 ALR 703; (1991) 91 ATC 4396; [1991] FCA 190; (1991) 21 ATR 1616

Commissioner of Taxation v Dalco (1990) 168 CLR 614

Commissioner of Taxation v Faichney [1972] HCA 67; (1972) 129 CLR 38; (1972) 72 ATC 4245; [1972] HCA 67; (1972) 3 ATR 435

Commissioner of Taxation v Forsyth [1981] HCA 15; (1981) 148 CLR 203; (1981) 34 ALR 263; (1981) 55 ALJR 340; (1981) 81 ATC 4157; (1981) 11 ATR 657; [1981] HCA 15

Commissioner of Taxation v Genys [1987] FCA 20; (1987) 17 FCR 495; (1987) 77 ALR 527; (1987) 87 ATC 4875; [1987] FCA 20; (1987) 19 ATR 356

Commissioner of Taxation v McCloy [1975] 1 NSWLR 202; (1975) 5 ALR 330; (1975) 75 ATC 4079; (1975) 5 ATR 315

Commissioner of Taxation v Payne [2001] HCA 3; (2001) 202 CLR 93; (2001) 177 ALR 270; (2001) 75 ALJR 442; 2001 ATC 4027; (2001) 46 ATR 228; [2001] HCA 3

Commissioner of Taxation v Weiner (1978) 78 ATC 4006; (1978) 8 ATR 335

Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301 (2013) 296 ALR 497; (2013) 91 ATR 1; [2013] FCAFC 30

Garrett v Commissioner of Taxation (1982) 58 FLR 101; (1982) 82 ATC 4060; (1982) 12 ATR 684

Handley v Commissioner of Taxation [1981] HCA 16; (1981) 148 CLR 182; (1981) 34 ALR 274; (1981) 55 ALJR 345; (1981) 81 ATC 4165; (1981) 11 ATR 644; [1981] HCA 16

Lunney v Commissioner of Taxation [1958] HCA 5; (1958) 100 CLR 478; [1958] ALR 225; (1958) 32 ALJR 139; (1958) 7 AITR 166; (1958) 11 ATD 404

Ronpibon Tin NL v Commissioner of Taxation [1949] HCA 15; (1949) 78 CLR 47; [1949] ALR 785; (1949) 56 ALR (CN) 1055; (1949) 23 ALJR 139; (1949) 4 AITR 236; (1949) 8 ATD 431

Swinford v Commissioner of Taxation [1984] 3 NSWLR 118; (1984) 80 FLR 1; (1984) 84 ATC 4803; (1984) 15 ATR 1154

Thomas v Commissioner of Taxation [1972-73] ALR 368; (1972) 46 ALJR 397; (1972) 72 ATC 4094; (1972) 3 ATR 165; 1972 HCA 101

Deputy Chief Health Officer, 'Restricted Activity Directions (No. 10)' in Victoria, Victorian Government Gazette, No S 297, 22 June 2020, 25

Deputy Chief Health Officer, 'Stay Safe Directions (No. 2)' in Victoria, Victorian Government Gazette, No S 297, 22 June 2020, 19

Public Health Commander, 'Permitted Worker Permit Scheme Directions' in Victoria, Victorian Government Gazette, No S 397, 6 August 2020, 55

'Significant events in COVID-19 vaccination practice in Australia', National Centre for Immunisation Research and Surveillance (Webpage, April 2023)

1. The COVID-19 pandemic caused major disruption to the working lives of millions of Australians, none more so than those who lived and worked in Melbourne, where the restrictions put in place by the Victorian State Government were reputed to be amongst the strictest in the world. This matter involves consideration of claims for what taxation professionals euphemistically call occupation expenses, and car expenses, occasioned by a taxpayer doing his usual job, in a different way, during the first full tax year of the COVID-19 pandemic.
2. Mr Hall is a sports presenter and producer employed full time by the Australian Broadcasting Corporation (ABC) in Melbourne. His role has two aspects: producing the ABC Sport Digital Radio station (Digital Role), and producing ABC live sports broadcasts, mainly NRL football (Live Role). In the income year 1 July 2020 to 30 June 2021, Mr Hall undertook all his Digital Role from a laptop in a spare bedroom at his home, and all of his Live Role, with one exception,[1] from the ABC's Southbank Studios in Melbourne.
3. This application concerns whether Mr Hall is entitled to a tax deduction in the 2021 income year for:

(a) occupation expenses, being the proportion of rent on his residential property referable to the use of his home office in performing his Digital Role; and > > (b) his car expenses incurred in driving between his residence in the inner eastern suburbs of Melbourne and the ABC studios at Southbank, a distance of less than 9 kilometres, on days when he performed both roles.

4. On 16 September 2022, the respondent (Commissioner) disallowed Mr Hall's objection (Objection Decision) to his earlier decision to disallow the claims in his 2021 income tax return for deductions for rent and car expenses incurred by Mr Hall in doing his job in the income year ended 30 June 2021 (2021 Income Year).
5. Mr Hall applied for a review of the Objection Decision to the Administrative Appeals Tribunal (AAT) on 22 September 2022. On 14 October 2024, the new Administrative Review Tribunal (ART) replaced the AAT and all matters which were before the AAT were transferred to the ART.[2] References to the Tribunal in this decision refer to the AAT prior to 14 October 2024, and the ART from that date.
   1. For the reasons set out below, I have determined that Mr Hall can claim a deduction for both the occupation expenses and the car expenses in the 2021 income year.

1. Mr Hall is a sports presenter and producer employed by the ABC. In June 2020, he and his wife moved from Sydney to Melbourne whilst he was employed by the ABC.[3] In moving to Melbourne, he and his wife located and rented a two-bedroom apartment in the Melbourne suburb of Armadale, a distance of around 8 kilometres from the ABC's studios at Southbank in Melbourne (Southbank Studios). The lease for the apartment was taken out solely in Mr Hall's name.[4]
2. Mr Hall's wife worked as a yoga instructor. She continued to give her yoga classes online, from the main living-dining area of the apartment, throughout the 2021 income year.
3. Mr Hall's work consisted of two quite distinct parts. The majority of his work, comprising about 75% of what he did, was the Digital Role. That role was undertaken exclusively from the spare or second bedroom of the apartment.
4. The remaining 25% of his work was the Live Role, which was undertaken from the Southbank Studios. On 5 June 2021, Mr Hall attended the A-League Grand Final at AAMI Park in Melbourne, at which he worked as a presenter and producer. This was the only occasion in the 2021 year that Mr Hall performed the Live Role from any location other than the Southbank Studios. Much of the Live Role consisted of him producing National Rugby League (NRL) games, which ran throughout the 2020 calendar year from, relevantly, July to late October, and then again in the 2021 calendar year from mid-March until the end of the 2021 income year on 30 June 2021. In addition to NRL and A-League games, Mr Hall also produced live broadcasts of cricket and some other sports. As a special arrangement during the course of the COVID-19 pandemic, the ABC provided on-site parking at the Southbank Studios for Mr Hall's use when he was attending there for his work.
5. The work undertaken by Mr Hall at the Southbank Studios required him to have a permit, issued in advance, so that he could attend and undertake his work there.[5]

1. Mr Hall estimated the 75/25 split between his two roles from analysing his work rosters for the 2021 year, which were in evidence.[6] His usual work week was from Thursday to Monday, for a standard daily amount of 7 hours and 36 minutes per day, although Mr Hall said and I accept, that he frequently worked longer than the standard 7 hours and 36 minutes.[7] His general pattern of work was:[8]
   • on Mondays and Fridays in any week Mr Hall undertook the Digital Role from home;
   • on Thursdays in NRL season he was rostered to work from 2 pm until 10.36 pm, but in fact commenced work in the Digital Role at home at about 12 noon, and then drove to the Southbank Studios to work on the live NRL broadcast, until 10.30 pm;
   • on Saturdays in the NRL season, he undertook the Digital Role from 12 noon to 5 pm at home, and then drove to the Southbank Studios to work on the live NRL broadcast, until 10.30 pm;
   • on Sunday in NRL season, he undertook the Digital Role from 10 am to 3 pm at home, and then drove to the Southbank Studios to work on the live NRL broadcast, until 6.30 pm; and
   • on Thursdays, Saturdays and Sundays outside the NRL season the spilt of work varied from being required to undertake the Live Role, broadcasting cricket or some other sport from the Southbank Studios, to being required to undertake the Digital Role from home.
2. The rosters which were produced by Mr Hall were not provided to him in advance to notify him of his weekly work hours, but rather were provided to him after he had competed the work, 'so that [he could] check that it correctly recorded [his] standard working hours and work performed for the fortnight that [had] already passed'.[9] The rosters are accurate insofar as they record the standard hours worked, that is, the 7 hours and 36 minutes per day. They are, however, inaccurate in that they understate the work that Mr Hall actually did, for example commencing work from home when he was rostered to undertake the Live Role but also undertook the Digital Role prior to going into the Southbank Studios, and nor do they record when he worked for longer than his standard hours. Mr Hall said that he did not correct minor discrepancies in the rosters as it made no difference to what he was paid.[10] I accept that the rosters are a good proxy for the work undertaken, supplemented by Mr Hall's own knowledge of his pattern of work.

1. Mr Hall's Digital Role required him to have access to a laptop computer, electricity and a good wi-fi connection. It also required him to work in a quiet environment as he needed to focus on what the was doing, so that he could listen to and edit audio files.
2. The second bedroom of the Armadale apartment was furnished extremely sparsely. It had a small wooden desk, a dining chair, and a small bookcase. The bookcase contained a range of books from work-related to personal interests. The room also had a built-in wardrobe which stored some personal items, including a vacuum cleaner. The desk was placed against the outside wall, back to the door, with the bookcase to the left behind the desk and the wardrobe to the right, with a floor-length window immediately to the right. This gave Mr Hall the opportunity to see outside whilst working, but reduced distractions as his back was to the door. A photograph of the room was included in the papers.[11] The room measured 11.78 square metres.
3. The remainder of the apartment comprised a main bedroom with ensuite bathroom, an open-plan living/dining/kitchen area, a laundry space and a second bathroom. It also had a small semi-enclosed balcony and two car bays. A floorplan of the apartment was included in the papers.[12] The total internal living area of the apartment was 72.79 square metres.[13]
4. There was no disagreement between the parties as to the size of the apartment, or the fact that the home office area comprised 16.18% of the total apartment area.
5. The total rent paid for the apartment in the 2021 income year was $36,326.23 which included a rent reduction Mr Hall negotiated.[14] Mr Hall's claim for occupation expenses, that is, the rent attributable to the second bedroom which he used as a home office, is $5,878.87.

1. As noted above, about 25% of Mr Hall's role required him to leave his home and attend at the Southbank Studios of the ABC, and on one occasion as AAMI Park.[15] A photograph of the Southbank Studios was put into evidence which makes it clear that the work done in the there was of a nature that required specialised and complex broadcasting equipment that could not be easily or conveniently replicated in a domestic environment.
2. Mr Hall drove to the Southbank Studios[16] in his private car, a Subaru Impreza, which he had purchased in 2018. Whilst theoretically he could have used public transport, or ridden his bike, he did not do so because of a number of factors:
   • the late nights and the distance of 8 km each way made bike riding impractical;
   • the ABC dictated to its employees that it preferred them to not use public transport to attend the Southbank Studios as a result of the risks of being infected with the virus; and
   • the ABC put in place two measures to encourage the use of private vehicles, being the rostered workers carpark,[17] and a car parking reimbursement scheme.
3. On the days on which he travelled to the Southbank Studios there was on-site secure car parking available to him at no cost. This was the rostered workers' car park and was a special arrangement made during the COVID-19 pandemic which was available to Mr Hall because his work required him to be there late at night.
4. From August 2020, he was required, as a matter of law,[18] to have a permit to attend the Southbank Studios for work purposes.
5. Mr Hall calculated that he travelled 1,595 km for work related purposes in the 2021 Income Year. The total claim for his car expenses is $1,148.40.

1. Mr Hall's working arrangements in 2021 were entirely dictated by matters beyond his control. The COVID-19 pandemic first reached Australia, in Victoria, in January 2020. Lockdowns commenced in around March 2020 and continued, on and off, for about 2 years. Significantly, the first vaccine did not become widely available in Australia until about March 2021, and was made generally available to people under 50, Mr Hall's age group, in May 2021. The primary course required 2 vaccinations, and by September 2021 a 3rd dose was being recommended for some parts of the population.[19] As a result of this, for most of the 2021 income year the only way to mitigate the risk of catching the virus was to avoid coming into contact with it. Consequently, governments, both in Australia and around the world, mandated movement restrictions and put in place other measures aimed at transmission minimisation.
2. Throughout the 2021 year there were restrictions imposed on Mr Hall which prevented him attending his usual workplace at the Southbank Studios. These restrictions were variously imposed by the Victorian Government, and by Mr Hall's employer, the ABC. Appendix A to this decision is a chronological summary of the combination of restrictions imposed.

1. On 16 March 2020, the Victorian State Government declared a state of emergency under section 198(1) of the Public Health and Wellbeing Act 2008 (Vic) (Public Health Act). The state of emergency was extended on numerous occasions to eventually cover the entire 2021 income year,[20] and beyond.
2. As part of the state of emergency, various work from home directions were made under the emergency powers in section 200 of the Public Health Act. The relevant directions operative from 1 July 2020 comprised restrictions on people leaving their homes, including for work, set out in the Stay Safe Directions (No 2),[21] and restrictions on employers set out in the Restricted Activities Directions (No 10).[22] These directions were varied from time to time during the 2021 year, and were supplemented by other directions made under the Public Health Act, including the implementation of the Permitted Worker Permit Scheme on 5 August 2020.[23]
3. The only period in the 2021 year where there were no Victorian Government imposed restrictions on Mr Hall working from the Southbank Studios was the period from 26 March 2021 to 27 May 2021.

1. The ABC implemented an organisation-wide policy for working during COVID-19, called the ABC Recovery Roadmap,[24] which had three stages. These were, in summary:
   • Stage 1, where only those staff identified by ABC Management as performing essential activities that could not be done remotely, or activities identified as critical functions, were permitted to work at ABC workplaces;
   • Stage 2, where staff were directed that 'anyone who can work from home should remain at home', and return to the workplace required prior approval from a Divisional Director or other senior person; and
   • Stage 3, where staff were permitted to return to work if approved by their manager to do so.
2. The stage at which the ABC was at varied throughout the period, depending on the general status of the pandemic.[25] Relevantly, Stage 3 was only in place during the 2021 income year between 29 March 2021 and 25 May 2021, a period of about 7 weeks, and Mr Hall was not amongst those approved to return to the Southbank Studios, other than to perform the Live Role.[26]
3. Consequently, throughout the entire 2021 income year, Mr Hall was not permitted by his employer to work from the Southbank Studios, or any other ABC workplace, other than to undertake the Live Role.

1. The starting point to considering deductibility of expenses is section 8-1 of the Income Tax Assessment Act 1997 (ITAA97), which relevantly provides:

8-1(1) You can deduct from your assessable income any loss or outgoing to the extent that:

(a) it is incurred in gaining or producing your assessable income;

. . .

8-1(2) However, you cannot deduct a loss or outgoing under this section to the extent that:

. . .

(b) it is a loss or outgoing of a private or domestic nature;

1. Division 28 of the ITAA97 contains provisions relating to the deductibility of car expenses for cars owned by an individual taxpayer, by using one of two allowable methods.[27] Relevant expenses are a loss or outgoing to do with a car, including operating a car and the decline in value of a car.[28] There are two methods for claiming deductibility of car expenses, the 'log-book method' and the 'cents per kilometre method'.[29] The 'cents per kilometre method' is only available for the first 5,000 business kilometres,[30] and uses the following formula:[31]

Number of *business kilometres travelled by the *car in the income year

Rate of cents/kilometre determined under subsection (4) for the car for the income year

... kilometres the *car travelled in the course of:

(a) producing your assessable income; or

(b) your *travel between workplaces.

You calculate the number of business kilometres by making a reasonable estimate.[32]

1. Travel between workplaces is defined in section 25-100 of the ITAA97. It relevantly excludes travel from a person's place of residence to a workplace and return, if the income earning activity had ceased at the first location at the time of the travel to the second location.
2. The prescribed rate for the 2021 income year was 72 cents per kilometre.[33]
3. Several things are apparent from this.
   • to claim a deduction, Mr Hall needed to make an election as to which of the two statutory methods of calculation to use;
   • having elected the cents per kilometre method, he had to make a reasonable estimate of the business kilometres he travelled in the income year, and then apply the legislative formula;
   • a claim was only available to him for his travel between workplaces; and
   • a deduction could only be claimed if Mr Hall had already commenced working at the time he travelled between his two workplaces.
4. Consequently, in the specific context of this case the ability to make the claim for car expenses depends in part on Mr Hall's claim for occupation expenses, so that the second bedroom of his apartment needed to be regarded as a workplace for him to succeed on the car expenses claim.

1. The entry point to the case law relevant to this decision are several High Court decisions which consider elements of the two limbs in the now section 8-1 ITAA97.
2. In Ronpibon Tin NL v Commissioner of Taxation,[34] the Court considered the meaning of the phrase 'incurred in gaining or producing accessible income', within the positive limb of section 8-1(1)(a), and concluded that the expenditure must be 'incidental and relevant to that end' and 'it is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of the assessable income'.[35]
3. Later in Lunney v Commissioner of Taxation,[36] the Court found that the essential character of the expenditure being sought to be deducted, not necessarily the purpose of the expenditure, was the determinative issue.[37]
4. As to the negative limb in section 8-1(2)(b), the Court made it plain in Commissioner of Taxation v Anstis,[38] that 'the concept of a particular type of expenditure being absolutely or always "private" cannot be sustained,'[39] relying in part on some analysis of Wilson and Hill JJ in Commissioner of Taxation v Cooper,[40] which case considered the deductibility of food.

1. Thomas v Commissioner of Taxation[41] is a single judge decision of the High Court in which a barrister was not permitted to deduct occupation expenses, being interest on a loan he took to build a room for him to work in at his home, when he maintained chambers in Brisbane. The decision turns on the characterisation of the loan, which funded the building of three rooms, as being of a capital, private or domestic nature, that is, falling within the negative limb of the now section 8-1.
2. Commissioner of Taxation v Faichney[42] is a single judge decision of the High Court in which a CSIRO scientist who undertook some work after hours from a purpose-built study at his home was denied a deduction for occupation expenses, including mortgage repayments. Deductions were allowable for heating, lighting and depreciation. The decision in respect to the occupation expenses turned on the fact that they were mortgage payments which were of a capital, private or domestic nature, that is, falling within the negative limb of the now section 8-1.
3. Handley v Commissioner of Taxation[43] is a Full Court decision of the High Court in which a majority found that a Sydney barrister was not permitted to deduct occupation expenses, including mortgage interest payments, rates and insurance premiums, when he maintained chambers elsewhere. The essential character test in Lunney was relied on in reaching the decision, as was the negative limb of the now section 8-1, with all Judges finding that the essential character of the expenditure was private or domestic in nature.[44]
4. Commissioner of Taxation v Forsyth[45] is a majority decision of the Full Court of the High Court involving a barrister in Melbourne whose home was owned by his family trust. The majority denied a deduction for occupation expenses, comprising a licence fee paid to the family trust, for a home study and some ancillary space; he too maintained chambers elsewhere. The essential character test in Lunney, and the court's decision in Handley, made earlier in the same year, were both relied on in reaching the conclusion that the expenses were not deductable. Mason and Wilson JJ found that the expenses were not incurred in gaining or producing assessable income, and Murphy J found they were of a private or domestic nature. Mason J also described the arrangement as artificial, 'apparently brought into existence for reasons of taxation'.
5. Caffrey v Commissioner of Taxation[46] is a decision of the Supreme Court of Western Australia in which a law lecturer at a college of advanced education was permitted a deduction for occupation expenses and travel expenses between Sydney and Bathurst. Significantly, the Court found that neither Thomas nor Faichney lays down any general rule of law, each being determined on their own facts.
6. Commissioner of Taxation v McCloy[47] concerns the purchase and use of a home office by a computer salesman whose role required him to attend the company offices only for a weekly sales meeting. The NSW Supreme Court declined a deduction for occupation expenses, and in doing so followed Ronbipon, Lunney, Thomas, and Faichney.
7. In Swinford v Commissioner of Taxation,[48] the NSW Supreme Court considered an occupancy expenses claim by a freelance scriptwriter who had specifically rented a flat in Sydney with a second bedroom she used as an office for her to work in, including holding meetings. In allowing the deduction claimed, the Court distinguished Handley and Forsyth on the basis that there was no measure of convenience about her working in her home office, it was her sole place of work, including that those she did work for required that she not work at their premises. In doing so, the Court also relied on Mason J's discussion of the use of the premises in Handley as supportive of the proposition that use was integral to the essential character test, from Lunney, in determining what the payments, being rent, were for.[49]

1. Lunney, which I have briefly considered above, is a case which concerns travel expenses. It considered the daily commute of two workers from their private residences to their normal places of work. Mr Lunney was a ship's joiner who worked at Darling Harbour, Sydney and commuted by bus each day between his home and his workplace, a distance of about 14 miles, about 23 km, each way. The High Court also considered the case of Mr Hayley, a dentist, who had his practice in Macquarie Street, Sydney and commuted by train each day from his residence to his workplace, a distance of about 8 miles, about 13 km, each way. The majority judgment emphasised that the expense needed to be 'incurred in, or, in the course of, earning assessable income'[50] in order to be deductable.
2. Commissioner of Taxation v Payne[51] concerned travel between two work locations by a man who was a commercial deer farmer and a pilot with an international airline. He lived on the deer farm rural NSW, and flew out of Sydney. The expenses he claimed were the costs of commuting between the deer farm and Sydney airport. The deer farm was a substantial business enterprise which required skill, time and experience, and so the case considered the question of whether travel between two places of unrelated income derivation was deductable. The High Court held that the travel was not deductable because it was not incurred in the course of deriving assessable income as distinct from incurred for the purpose of deriving his income, relying on, amongst other authorities, Ronpibon, as 'neither the taxpayer's employment as a pilot nor the conduct of his business farming deer occasioned the outgoings for travel expenses'.[52]
3. Garrett v Commissioner of Taxation[53] involved a specialist medical practitioner who conducted his practice at five separate rural locations in NSW and in Sydney, whilst living on a farm at one of the rural locations. The farm grew crops and had grazing animals as its business, and included consulting rooms where Dr Garrett conducted a general medical practice for the benefit of the local community. He commuted between the various locations of the farm and the other medical practices by flying, which was convenient for a range of logistical and practical reasons, including the fact that it facilitated the transport of refrigerated vaccines between locations. The Court found that the travel expenses of the aircraft were essential to the manner in which he earned his income and allowed the deduction.
4. In Commissioner of Taxation v Collings,[54] a computer specialist who was required to do on call work from home sought a deduction for her travel expenses in driving into work when needed. Her work duties included the requirement that she attend at her regular workplace out of hours to resolve computer problems which she was otherwise unable to resolve remotely. Ms Collings' on call work took place both during the week after normal working hours, and on weekends. In permitting the deduction the Court was mindful that her journeys to and from the office were undertaken 'not to commence duty, but to complete an aspect of the employment already underway before the journey commences'.[55] The question to be answered was, relying on Lunney, 'whether the expense was an expenditure incurred in, or in the course of, earning assessable income.'[56]
5. In Commissioner of Taxation v Genys,[57] an agency nurse who worked at various different locations on an ad hoc basis, and who received telephone calls at home to tell her where her nursing services were required on any given day, was not allowed a deduction for travel expenses. The receipt of the telephone calls at home to tell her where she should attend work on any given day was insufficient to make her home a workplace so that she could be considered to have been already at work when she undertook the travel. Her situation was distinguished from itinerant workers, who move between places of work throughout the working day.[58]

1. As is the usual case with reviews to the Tribunal brought pursuant to rights afforded under Part IVC of the Taxation Administration Act 1953 (TAA), the taxpayer bears the burden of proving that the assessment is excessive or otherwise incorrect, and what the assessment should have been.[59] The case law in this area is familiar, frequently discussed and not in issue in this matter.[60]
2. It is plain from the manner in which the case was run that the only issues in contention were the occupation expenses and the car expenses, so that if Mr Hall is successful on either of those two issues he would be partially successful, and if he was successful on both of those issues he would be entirely successful. This is not an uncommon approach to discharging the onus where the only issues concern one or more deductions. This is all the more so where, as here, the taxpayer's income comprises payments from his sole employer plus only $1 in interest.[61]

1. The main evidence in the matter was that of Mr Hall, who made two witness statements[62] and was cross-examined at the hearing. I found Mr Hall to be a straightforward and credible witness who made appropriate concessions, and was direct and clear in his answers.
2. I admitted the following evidence:

(a) Exhibit A1 - Affidavit of Inshani Sappideen Ward, dated 12 December 2024, including exhibit IW-1; > > (b) Exhibit A2 - Witness statement of Nathaniel Hall dated 9 October 2023, including exhibits NFH-1 to NFH-24; > > (c) Exhibit A3 - Witness statement of Nathaniel Hall dated 10 May 2024; and > > (d) Exhibit R1 - T-Documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975.[63] > > 1. I was also assisted by: > > (a) The Applicant's Statement of Facts, Issues and Contentions, filed 9 October 2023 (ASFIC); and > > (b) The Commissioner's Statement of Facts, Issues and Contentions, dated 1 December 2023 (RSFIC); > > (c) The Applicant's written submissions, dated 1 November 2024 (Applicant's submissions); and > > (d) The Commissioner's written submissions, dated 22 November 2024 (Commissioner's submissions).

1. The cases make it abundantly clear that, as a general proposition, occupation expenses for a home office have only been permitted to be claimed as a deduction in very limited circumstances. The key to determining deductibility in Mr Hall's case is not to be found in the individual factual matters which have led the courts to make the various decisions which I have set out above, and the very many more cases which were cited in the argument and submissions, which I have not set out. Rather, it lies in the principles that those cases have established as to why, or why not, occupation expenses may, in any particular factual circumstance, fall within section 8-1(1) of the ITAA97.
2. The focus on some of the minutiae of the factual circumstances of the decided cases leads to considering whether anyone else accessing the room,[64] its separateness from the remainder of the residence,[65] whether there were personal items stored in a wardrobe or bookshelf,[66] the detail of how it was furnished,[67] including, for example, the fact there was a piano in the room,[68] or whether and what meetings were held in the room,[69] can provide the answer. In my view these factors can serve to obscure rather than illuminate the true essence of the inquiry which is whether the room was truly the taxpayer's actual workplace, rather than, for example, a mere convenient adjunct to the workplace his employer provided.[70] Whilst these facts were plainly relevant to the factual circumstances which underpinned the numerous decisions I was taken to, I do not accept the Commissioner's submission that the physical characteristics identified in other cases, even of the highest authority, are physical characteristics that will be decisive in this case. As the cases amply illustrate, the nature of a workplace and the means of working which prevailed in the 1950s, 1960s, 1970s, and 1980s are not the way of the modern working world, much less the working world of Melbournians during the quite extraordinary income year 2021.
3. In my view, the principles the cases require me to consider are these.

(a) Was the essential nature of the expenditure incurred in gaining his assessable income, or was it purely private or domestic in nature? If it is the former, the expenditure may be deductable, if it is the latter, it is precluded by the negative limb in section 8-1(2) ITAA97.[71] > > (b) What is the use of the premises, which in turn informs the essential nature of the expenditure.[72] > > (c) Whether the incurring of the expenditure was done as a matter of convenience to the taxpayer.[73] > > (d) Home office occupation expenses are deductable in some circumstances.[74] > > (e) There is no basis in law for saying that particular types of expenditure are only ever personal or domestic in nature.[75]

4. Mr Hall had no choice in the 2021 income year as to where he worked. His employer, quite appropriately, would not permit him into the Southbank Studios other than for an extremely limited purpose undertaken for clearly identified hours. At the same time, the Victorian Government instituted legal directives which mandated that he work from home, precluding the possibility of working from the park, the coffee shop, the beach, a community-based co-working facility, or anywhere else that a person might choose. In effect, the combination of the ABC's directions and the Victorian Government's exercise of its powers under the Public Health Act meant the spare bedroom of his rented apartment was his workplace for the year.
5. It is notable that Mr Hall rented the two-bedroom apartment when he moved to Melbourne in June 2020, with the knowledge that it would be his workplace, at least for the foreseeable future. He was told by his manager in late May 2020 that he would need to work from home in Melbourne when he moved there.[76] He could have been under no illusions about his need to work at the premises he rented until both the ABC and the Victorian Government lifted the restrictions he was under, those restrictions having been put in place in mid-March 2020. I infer that when he rented his apartment in Melbourne this was a factor that was in his mind.
6. Renting a two-bedroom apartment for the year when he was obliged to work from home, and using the second bedroom as his workplace, was a necessary and required element of his work in the 2021 income year. It cannot be said that the additional expenditure he made on the rent for the second bedroom, used as his workplace in the 2021 year, was purely of a private or domestic nature, rather it was for the purposes of gaining his assessable income. If the claim had been for rent more generally, or for any other space in the apartment, or if the second bedroom had been used generally by both Mr Hall and his wife as part of their joint living space,[77] the essential nature of the expenditure may not have been related to earning his assessable income, but that is not the deduction claimed in this case.
7. As to the question of convenience, the choice to work from his second bedroom was not one which was made as a matter of convenience. The choice to work at home was taken away from Mr Hall, appropriately so, by the combination of the Victorian Government and the ABC. As to his choice of where in the apartment he worked, I do not accept this was a matter of mere convenience for him to work in the spare bedroom; rather it was the only feasible place available to him to earn the majority of his assessable income in the 2021 income year. Whilst he could theoretically have worked in another part of his apartment, that was not a realistic proposition given the combination of his work needs,[78] his wife's work needs, and of course the vagaries of the Melbourne weather that would have made any possibility of setting up his workplace on the outdoor balcony unrealistic. In his evidence Mr Hall was clear that he only ever worked in the spare bedroom and that it was the only space appropriate for him to work in.
8. Whilst the use of an apartment is generally domestic, the particular requirements imposed on Mr Hall by both the Victorian Government and his employer, meant that in the 2021 income year this particular apartment was both his home and his workplace, being where he earned the majority of his assessable income. That is, the expense was incurred in gaining his assessable income and was not private or domestic. Whether it would be so in any other circumstances or any other income year, is not something I need consider.
9. I note the Commissioner contended that Mr Hall's use of his home office was merely temporary. Whilst I do accept that it was temporary in the sense it was transient and would pass once the lockdowns finished and the ABC permitted him to return to the Southbank Studios on a full-time basis, during the 2021 income year it was not temporary but a fixed part of Mr Hall's working life for the entire income year. The evidence clearly established that Mr Hall's main workplace for the entire year was the spare bedroom. This decision has no impact on what can be claimed by Mr Hall in any later year of income, which would need to be assessed based on the facts which prevailed at that later time.
10. For the reasons above, I allow the deduction for rent for Mr Hall's home office for $5,878.87.

1. Mr Hall elected to use the 'cents per kilometre' method in calculating his claim for car expenses. This being the case, as the Commissioner correctly submits,[79] for the expenses to be deductable they must be travelled in the course of producing Mr Hall's assessable income,[80] and calculated by making a reasonable estimate of the kilometres travelled.[81]

1. It is clear from the travel expenses cases I have set out above that the mere activity of commuting to work is not sufficient to obtain a deduction for the associated costs. Whilst Lunney focused on the essential character of the expenses, it is plain from later decisions, like Garrett and Collings, that whether the worker has commenced their work activities before undertaking the travel for which they claim, is a critical factor. The reasons of Hill J, in dissent, in the Full Court in Commissioner of Taxation v Payne explains the legal position in the following terms:[82]

Three propositions are clearly established by the cases. > > i. Travel from home to work, whether the taxpayer is an employee in the ordinary sense or carries on a business, is not deductible - it is not incurred in gaining or producing the assessable income. The usual explanation that is given for this is that the income producing activity with which expenditure must have a sufficient connection has not commenced until the taxpayer arrives at work. The travel is a condition precedent to the commencement on the day of the income producing activity rather than a working expense. > > ii. Travel from work to home is likewise not deductible. Presumably the rationale for this is the opposite to that applicable to the first proposition. The income producing activity has ceased for the day so that the sufficient connection between the outgoing and that activity is not made out. Again it is irrelevant whether the taxpayer's income producing activity is employment as an employee or the carrying on of a business. > > iii. Travel on work from one place of employment to another in the same job, or from one place of business to another for the purposes of the one business, is deductible. That is because the expenditure relates to the income earning activity which continues throughout the period of travel. The expenditure is a working expense. It is expenditure on work, not expenditure which is antecedent to or subsequent to work.[83]

2. Subsequent to Payne being decided in the High Court, Anstis explicitly explained that no expense is purely personal or domestic in nature. Whilst earlier in time, Garrett and Collings are apt illustrations of this principle. They base the deductibility of the taxpayer's travel expenses on the connection the travel has to work having already commenced; being an expense that was incurred in the course of the taxpayer earning their assessable income, fitting within category 3 in Hill J's analysis. That is, it is travel undertaken on work, not travel undertaken to work.
3. The resolution of the issue in Mr Hall's circumstances requires determination of whether he had commenced his working day at his primary workplace, his home, on the days he claims the deduction for his car expenses, or concluded his working day working at his home, following him having attended at the Southbank Studios. His evidence was that he commenced his working day at home undertaking the Digital Role before going into the Southbank Studios, and after completing his work at the Southbank Studios he returned home.[84] This pattern was followed on 99 occasions in the 2021 income year.
4. The only exception to this pattern was when he worked, once, as a commentator at AAMI Park. His evidence of his role in commentating the A-League Grand Final on 27 June 2021 is in fact illustrative of how his working day unfolded when he was undertaking the Live Role. On that day he commenced the day by performing his Digital Role at home, he then travelled to AAMI Park, about 5.5 km from his home, commentated the game,[85] and returned home at the conclusion of his work.
5. Mr Hall's evidence was properly tested, but not shaken, in cross-examination. The evidence was supported by and grounded in his rosters, which were in evidence.[86] I accept it.
6. Two further aspect of Mr Hall's work arrangements are significant.

(a) Mr Hall only had one employer, the ABC, but two distinct aspects to his job, the Digital Role and the Live Role, and each of these aspects of his work, during the 2021 income year, could only be undertaken from the location in which he undertook them. > > (b) Mr Hall's employment was not arranged as two shifts, split between the two distinct parts of his job. On the days when Mr Hall closed his laptop at home, picked up his car keys and drove to the Southbank Studios or AAMI Park, he was at work the entire time and his travel was therefore 'on work', as were the return journeys on those days.

1. Mr Hall claimed a total distance travelled for work of 1,595 km. This was an estimate based on the number of trips he undertook and the distance he travelled. With the exception of the AAMI Park workday, his travel took about 8 km in each direction. He drove one of two routes to or from work, and these differed only marginally in their total distance. There were 99 trips in each direction to the Southbank Studios and one return trip, to AAMI Park. The routes taken were not unreasonable, for example by taking Mr Hall out of his way on some scenic detour for his personal pleasure. The cross-examination probed the trips including whether Mr Hall used them for any other purpose, for example collecting groceries, but he did not.
2. Whilst the Commissioner challenged the reasonableness of the estimate, I am persuaded that it is reasonable. The mathematical basis for it has been explained, and the factual underpinning of it was put into evidence. Importantly there was no real challenge to Mr Hall's estimate of the distance between his home and Southbank Studios, or his home and AAMI Park. It is also a modest claim, supported by his work rosters.[87]
3. In my view the evidence is sufficient for me to conclude that Mr Hall made a 'reasonable estimate'[88] of the business kilometres he travelled between his two workplaces. Having done that, he applied the formula in the legislation and relied on the relevant legislative instrument to provide the cents per kilometre.
4. I allow the deduction for car expenses of $1,148.40.

1. My decision to allow the two deductions claimed means that, to the extent of the two deductions Mr Hall claimed which I have allowed, I have found that the Commissioner's assessment was excessive.[89] Mr Hall submitted that I should find that his correct taxable income for the 2021 year was $120,186.73, calculated as follows.

1. No submissions were made in opposition to this calculation and I am satisfied that it is correct. Accordingly, Mr Hall has discharged the onus of proving what the assessment should have been.

1. Accordingly, the decision of the Commissioner is set aside and the matter is remitted to the Commissioner to amend the assessment in accordance with these reasons.

I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for the decision herein of Deputy President Clare Thompson SC

...............................[sgd].......................................

Mr Hall was directed to only leave his residence to attend work if it was not reasonably practicable to work from home.

The ABC was directed not to permit workers to perform work at the employer's premises if it was reasonably practicable for the worker to work from home.[98]

All staff required to work from home. Only staff identified by ABC management as performing essential activities that could not be done remotely at home, or activities identified as critical functions, permitted to work at ABC workplaces.[99]

Mr Hall was directed not to leave his residence to attend his work premises unless, relevantly, he carried a current Permitted Worker Permit and if it was not reasonably practicable to work from home. Additionally, Mr Hall could not enter or remain on work premises without holding a current Permitted Worker Permit.

The ABC was directed not to permit any workers to perform work at the employer's premises if it was reasonably practicable for the worker to work from home or elsewhere.[100]

Mr Hall was directed to only leave his residence to attend work if it was not reasonably practicable to work from home.

The ABC was directed not to permit any workers to perform work at the employer's premises if it was reasonably practicable for the worker to work from home or elsewhere.[102]

Mr Hall was permitted to attend work at work premises if his employer had advised him that it was permissible for him to do so or if it was not reasonably practicable to work from home.

The ABC was permitted to have up to 25% of its workforce return to work at work premises.

Anyone who could work from home was directed that they should remain at home.

Return to ABC workplace needed prior approval from Divisional Director or Head.[105]

Mr Hall was directed to only leave his residence to attend work if it was not reasonably practicable to work from home and he was an essential worker or worked for an essential provider.

The ABC was directed not to permit any workers to attend work premises where it was reasonably practicable for the worker to work from home.[108]

Mr Hall was permitted to attend work at work premises if his employer had advised him that it was permissible for him to do so or if it was not reasonably practicable to work from home.

The ABC was permitted to have up to 50% of its workforce return to work at work premises.[110]

No relevant restrictions on working at work premises.[112]

Staff who had been approved by their managers could return on site.

All other staff were required to continue to work from home.[115]

Mr Hall was directed to only leave his residence to attend work if it was not reasonably practicable to work from home and he was an authorised worker or worked for an authorised provider.

The ABC was directed not to permit any workers to attend work premises unless they were an authorised worker and it was not reasonably practicable for the worker to work from home.[118]

The ABC was directed to only permit workers to perform work at the employer's premises if it was not reasonably practicable for the worker to work from home.

Mr Hall was directed to only attend work at work premises if it was not reasonably practicable to work from home and he was advised by his employer that it was permissible for him to return to the office.

The ABC was directed to only permit workers to work at work premises if it was not reasonably practicable to work from home and it was to have no more than 50% of its workforce working at work premises.[120]

Mr Hall was permitted to attend work at work premises where permitted by his employer.

The ABC was permitted to have no more than 75% of its workforce working at work premises.[122]

[1] The A-League Grand Final on 27 June 2021, which he attended and worked as the presenter, live from the venue.

[2] Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth), Schedule 16 Part 5 section 24.

[4] Ts 17 December 2024, 33 Ln 34 - 36.

[5] Exhibit A2 at [76], attachment NFH-18, NFH-19, NFH-20; T17,338.

[13] That is, excluding the balcony and the car bays.

[16] And on 5 June 2021 to AAMI Park for the A-League Grand Final.

[17] See paragraph [‎10] above.

[18] Public Health Commander, 'Permitted Worker Permit Scheme Directions' in Victoria, Victorian Government Gazette, No S 397, 6 August 2020, 55.

[19] 'Significant events in COVID-19 vaccination practice in Australia', National Centre for Immunisation Research and Surveillance (Webpage, April 2023) .

[21] Deputy Chief Health Officer, 'Stay Safe Directions (No. 2)' in Victoria, Victorian Government Gazette, No S 297, 22 June 2020, 19.

[22] Deputy Chief Health Officer, 'Restricted Activity Directions (No. 10)' in Victoria, Victorian Government Gazette, No S 297, 22 June 2020, 25.

[23] ASFIC at [57]; Public Health Commander, 'Permitted Worker Permit Scheme Directions' in Victoria, Victorian Government Gazette, No S 397, 6 August 2020, 55.

[24] Exhibit R1, T1, 13 - 14; Exhibit A, NFH-3.

[26] Exhibit A2, NFH-13; Exhibit A2, NFH-14; Exhibit A2 at [40], [59].

[27] Section 28-10, 28-12 of the ITAA97.

[32] Section 28-25(3) of the ITAA97; emphasis added.

[33] Income Tax Assessment Act 1997 - Cents per Kilometre Deduction Rate for Car Expenses 2020 (Cth), dated 1 May 2020.

[34] [1949] HCA 15; (1949) 78 CLR 47; [1949] ALR 785; (1949) 56 ALR (CN) 1055; (1949) 23 ALJR 139; (1949) 4 AITR 236; (1949) 8 ATD 431.

[35] [1949] HCA 15; 78 CLR 47, 56, 57.

[36] [1958] HCA 5; (1958) 100 CLR 478; [1958] ALR 225; (1958) 32 ALJR 139; (1958) 7 AITR 166; (1958) 11 ATD 404.

[37] [1958] HCA 5; 100 CLR 478, 497.

[38] (2010) 241 CLR 443; (2010) 85 ALJR 122; (2010) 76 ATR 735; [2010] HCA 40.

[39] [2010] HCA 40; 241 CLR 443, [38].

[40] [1991] FCA 190; (1991) 29 FCR 177, 189, 201; [1991] FCA 190; (1991) 99 ALR 703; (1991) 91 ATC 4396; [1991] FCA 190; (1991) 21 ATR 1616.

[41] [1972-73] ALR 368; (1972) 46 ALJR 397; (1972) 72 ATC 4094; (1972) 3 ATR 165; 1972 HCA 101.

[42] [1972] HCA 67; (1972) 129 CLR 38; (1972) 72 ATC 4245; [1972] HCA 67; (1972) 3 ATR 435.

[43] [1981] HCA 16; (1981) 148 CLR 182; (1981) 34 ALR 274; (1981) 55 ALJR 345; (1981) 81 ATC 4165; (1981) 11 ATR 644; [1981] HCA 16.

[44] [1981] HCA 16; 148 CLR 182, 194, 197, 202.

[45] [1981] HCA 15; (1981) 148 CLR 203; (1981) 34 ALR 263; (1981) 55 ALJR 340; (1981) 81 ATC 4157; (1981) 11 ATR 657; [1981] HCA 15.

[46] (1973) 21 FLR 427; (1975) 73 ATC 4144; (1973) 4 ATR 109. Notably the case was later rerun before a different Judge, with a different result, after it became apparent that the case had been decided on the wrong income year.

[47] [1975] 1 NSWLR 202; (1975) 5 ALR 330; (1975) 75 ATC 4079; (1975) 5 ATR 315.

[48] [1984] 3 NSWLR 118; (1984) 80 FLR 1; (1984) 84 ATC 4803; (1984) 15 ATR 1154.

[49] [1984] 3 NSWLR 118, 126.

[50] [1958] HCA 5; 100 CLR 478, 501.

[51] [2001] HCA 3; (2001) 202 CLR 93; (2001) 177 ALR 270; (2001) 75 ALJR 442; 2001 ATC 4027; (2001) 46 ATR 228; [2001] HCA 3.

[53] (1982) 58 FLR 101; (1982) 82 ATC 4060; (1982) 12 ATR 684.

[54] (1976) 10 ALR 475; (1976) 76 ATC 4254; (1976) 6 ATR 476.

[55] 6 ATR 476, 484, see too 488 quoting Lord Wilberforce in Taylor v Provan [1975] AC 194.

[56] 6 ATR 476, 491.

[57] [1987] FCA 20; (1987) 17 FCR 495; (1987) 77 ALR 527; (1987) 87 ATC 4875; [1987] FCA 20; (1987) 19 ATR 356.

[58] For example, Commissioner of Taxation v Weiner (1978) 78 ATC 4006; (1978) 8 ATR 335.

[60] Commissioner of Taxation v Dalco (1990) 168 CLR 614; Gashi v Federal Commissioner of Taxation ((2013) 209 FCR 301 (2013) 296 ALR 497; (2013) 91 ATR 1; [2013] FCAFC 30; Bosanac v Commissioner of Taxation (2019) ALJR 1327; [2019] HCA 41.

[63] Now section 23 of the Administrative Review Tribunal Act 2024 (ART Act).

[67] Swinford, Faichney, Handley, Forsyth.

[77] I note that the evidence that the bookcase contained some books which were not work related, and there was a vacuum cleaner stored in the built-in wardrobe, but these things are minor, even trifling, in the context of this case. The Commissioner expressly disavowed any challenge to the calculation of the floor area of the calculation: Ts 17 December 2024, 37 Ln 17.

[78] Access to good wi-fi, quiet so as to provide an environment to focus on the tasks, electricity for his laptop, and regular established working hours largely dictated by his employer.

[80] Section 28-25(3)(a) of the ITAA97.

[82] (1990) 90 FCR 435; [1999] FCA 320 at [3]

[84] Exhibit A2, [33] - [36]. There were no instances in which he commenced at the Southbank Studios and completed his workday at home. This is hardly surprising given live sports broadcasting of Australian sports are typically in the afternoon or evening.

[85] Which I understand resulted in a 3-1 win to Melbourne City over Sydney FC.

[87] In light of section 28-20(2)(2) of the ITAA97, the fact that the claim was based on the log-book method in his initial income tax return is of no moment as the legislation expressly permits a taxpayer to change the method of calculation he has elected to use.

[88] From the definition of business kilometres in section 28-25(3) of the ITAA97.