27 January 1987 Income Tax Severed Letter 7-0890 - [Travelling 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.

DATE 27/1/87

TO SYDNEY DISTRICT OFFICE

FROM HEAD OFFICE Small Business and General Division D.Y. Dalphy (613) 957-2134

ATTENTION: Jody Sutherland Enquiries & Office Examination

Travelling Expenses Paragraph 8(1)(h) of the Income Tax Act (the "Act")

This is in reply to your memorandum of July 25, 1986, concerning the deductibility of travelling expenses.

Specifically, you have requested our comments with regard to the application of paragraph 8(1)(h) of the Act in the following situations:

1. A teacher reports to the same school each morning but travels to a different school each afternoon.

2. A teacher does not report to one specific school, but travels to a number of schools each day.

3. A teacher is employed on a part-time basis to teach evening classes two nights a week (at two different schools). This teacher would travel from home to each school.

4. As part of his duties, an employee at a very large plant has to travel to all areas of the plant. The employee is not supplied with transportation and is not reimbursed for his expenses, but "has to use his own vehicle".

In order for an employee to be entitled to deduct travel expenses by virtue of paragraph 8(1)(h) of the Act, the amounts expended must be for "travelling in the course of his employment" and the employee must satisfy all the requirements of that paragraph of the Act. As we do not have complete details of the aforementioned situations with regard to the applicability of subparagraphs 8(1)(h)(ii) and (iii) of the Act, we refer you to Interpretation Bulletin IT-272R and, in particular, to paragraph 24 of the Special Release dated February 4, 1985. Accordingly, our comments are limited to our interpretation of the phrase "travelling in the course of his employment" and subparagraph 8(1)(h)(i) of the Act.

It is a question of fact as to whether an employee is "ordinarily required to carry on the duties of his employment away from his employer's place of business or in different places". Based on the information contained in your memorandum, we are of the opinion that, if the teachers referred to in situations 1 and 2 are (respectively) employed by one school board and merely work at various locations (and are not reporting to two or more different employer/school boards) between which it is a matter of regular occurrence to travel, and the other requirements of paragraph 8(1)(h) are met, expenses in respect of travelling between schools may be deducted from employment income. It should be noted however that as expenses incurred in travelling between an employee's home and a school would be considered personal travel, expenses incurred in this regard could not be considered to be incurred for travelling "in the course of employment" and, as such, would not be deductible from employment income.

Subparagraph 8(1)(h)(i) of the Act provides that amounts expended for travelling in the course of employment are deductible where a taxpayer "was ordinarily required to carry on the duties of his employment ... in different places" (providing, of course, that the other requirements of this paragraph of the Act are met). The Departmental practice in this regard is set out in paragraph 23(d) of Interpretation Bulletin IT-272R . In particular, this paragraph provides:

"an employee who is required to travel from building to building within the boundaries of an employer's property meets this requirement if the employer's property is very large and the distance between buildings is sufficient to justify the use of a car".

Accordingly, if the criteria of this paragraph (and the other requirements set out in paragraph 8(1)(h) of the Act) are met, expenses incurred by an employee in travelling to various areas of a plant may be deducted from employment income.

We hope these comments will assist you. If you would like to provide us with additional details relating to the aforementioned situations, we would be pleased to make further comments.

for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch