21 March 2001 External T.I. 2001-0067995 - TRAVEL & OFFICE EXPENSES

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: 1. Whether travel between an employee's home office and his or employer's place of business is personal in nature. 2. Whether an employee is entitled to deduct work space in the home expenses.

Position: 1. Generally, yes 2. No

Reasons: 1. If an employee, whose regular place of work is the home office, is required to regularly and habitually attend staff or other meetings at the main office, the main office generally remains one of two locations from which the employee regularly performs the duties of employment. As a result, travel between such locations is viewed as personal in nature. 2. The requirement in either subparagraph 8(13)(a)(i) or (ii) of the Act has not been satisfied.

XXXXXXXXXX 2001-006799
M. Eisner, CA
March 21, 2001

Dear XXXXXXXXXX:

Re: Employees - Office Expenses and Travel

This is in reply to your letter received on January 30, 2001, concerning the above-noted subject.

In the circumstances of your situation, employees provide electrical services at customers' premises. So that each employee can receive daily instructions from his or her employer concerning the services (so that the employee is no longer required to report daily to the employer's place of business), employees are expected to provide space at home for a computer terminal, printer, telephone, and a fax machine, which are provided by the employer. However, the employees must attend meetings periodically at their employer's place of business. You have requested our views on whether the travel between the residence of an employee and the employer's place of business, to attend meetings, is of a personal nature. In addition, you have requested our views on whether the employees are entitled to claim work space in the home expenses.

Our Comments

The review of completed transaction falls within the responsibility of your local Tax Services Office. However, we are prepared to provide the following general comments.

With respect to whether certain travel is considered employment related or personal travel for income tax purposes, the employee's regular place of work is a determining factor since travel from one's home to one's regular place of work would be considered personal in nature. The regular place of work of an employee is usually the location at or from which the employee performs the duties of employment, and may be at the employee's home. However, there may be more than one regular work place from which an employee performs employment duties and an employee's work place may change from time to time. If an employee, whose regular work place is the home office, is required to regularly and habitually attend staff or other meetings at the employer's premises, the employer's premises generally remains one of two locations from which the employee regularly performs the duties of employment. As a result, travel between such locations is generally viewed as personal in nature.

With respect to your second concern, we have enclosed a copy of Interpretation Bulletin IT-352R2 "Employee's Expenses, Including Work Space in Home Expenses" in which work space in the home expenses are discussed, as well as the related reporting requirements. As indicated in paragraph 2 of IT-352R2, subsection 8(13) of the Income Tax Act prohibits an employee from deducting work space in the home expenses unless the work space is either

(a) the place where the individual principally (more than 50% of the time) performs the office or employment duties, or

(b) used exclusively during the period to which the expenses relate to earn income from the office or employment and, on a regular and continuous basis, for meeting customers or other persons in the ordinary course of performing the office or employment duties.

On the basis of the information you provided us, it appears that an employee in the circumstances you have set out would not satisfy either of the above two requirements.

Should you require further assistance, you may contact your local Tax Services Office.

Yours truly,

Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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