16 June 1997 Internal T.I. 9713976 - STANDBY CHARGE-TRAVEL HOME, WHETHER PERSONAL/BUSINESS

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:

whether travel is personal or employment related in six different scenarios

Position:

all taxable

Reasons:

para 5 of IT-63R4

		June 16, 1997

A. H. Gowling	HEADQUARTERS
	A/Director			Sandra Short
	Verification Division		(613) 957-8953
	VECR Branch

	Attention:  B. Latourell
		971397

Benefit from Employment: Employer-provided vehicles

This is in reply to your correspondence of May 14, 1997, concerning benefits enjoyed by employees when an automobile or other vehicle is provided by an employer. You have asked that we consider the request of an employer to not include an amount in an employee's income, as a result of having provided the employee with a vehicle for travel between the employee's home and the employer's place of business, in the following situations:

1.On the day preceding the day that the employee needs the vehicle for business travel, the employee takes the vehicle home from the office.

2.At the end of a day of business travel, an employee drives the vehicle home, and returns the vehicle to the office the following day.

3.For vehicle security reasons, an employee may be required on an occasional, rotational basis to drive a vehicle from the office to his or her home for overnight parking, and drive the vehicle back to the office the following day.

4.An employee may be required to temporarily (up to one month) work at another office and use a vehicle for travel between his or her home and the new office location. During this period, the employee's original position is neither cancelled, changed nor filled permanently by another employee.

5.An employee, who does not have a permanent office or workstation may be required to work from home. Provided that the home qualifies as the place of work, and the employer's place of business is visited only occasionally (once or twice a month), the vehicle can be used for driving between the home and employer's place of business.

Finally, the employer has also asked that the payment of a meal allowance, mileage and parking to an employee who, using their personal vehicle, occasionally visits (once or twice a month) the employer's place of business, and in which he or she has no workstation, not trigger a taxable benefit in the hands of the employee.

Our Comments:

As you are aware, paragraph 5 of Interpretation Bulletin IT-63R4 states that "...personal use includes travel between the employee's place of work and home, even though the employee may have to return to work after regular duty hours. An exception occurs, however, where (as required by the employer or with the employer's permission) the employee proceeds directly from home to a point of call other than the employer's place of business to which the employee reports regularly (e.g. effecting repairs at customers' premises), or returns home from such a point."

Given the comments above, it does appear that the situations in 1 through 5 above reflect the personal use of an employer provided vehicle. The position cited in the IT and quoted above was put in place a couple of decades ago in order to minimize unnecessary trips to and from the office just to preserve the employment-related travel status to and from points of call other than the regular place of employment. We comment on the specific situations outlined above as follows.

1.The fact that an employee must travel for employment purposes first thing in the morning does not make the trip home the evening before employment-related.

2.Similar to the comments in 1 above, while the trip home from a day of business or employment-related travel is not personal, this does not mean that the trip into the regular place of employment the next day is other than personal travel.

3.The fact that an employee may be required to drive an employer-provided vehicle to his or her home on occasion, for reasons of security, lack of parking facilities at the employer's place of business, for business use the following day, or for some other reason, does not mean the primary purpose of that trip from office to home is other than personal in nature.

4.The regular workplace is usually the location at or from which the employee performs the duties of employment. However, there may be more than one regular workplace and the place from which an employee performs the duties of employment may change from time to time. Travel from home to a temporarily different regular workplace is personal. Given the reference to the employee travelling home each evening, we have assumed this situation is not intended to refer to travel assistance provided to an employee working at a special work site or remote work location.

5.This situation appears to contemplate an employee who, while ordinarily working from home, is provided a vehicle. So long as the employer's place of business continues to be a regular place of employment of the employee (to hand in reports, to attend staff meetings or meet with clients and so on), the travel to and from the employer's location remains personal travel. The Department has taken the position that it is in the nature of some employment situations that there may be more than one location which may be viewed as a regular workplace.

It is our opinion that the payment of a meal allowance, mileage or other expenses by an employer will ordinarily require the inclusion of an amount in an employee's income in any situation where the employer's office being "visited" is a regular place of employment of the employee. We are not clear on what is meant by "visiting" an office of the employer but assume that this means that the employee is reporting there for work related reasons, such as those discussed in 5 above. In our view, reporting to the employer's location on a regular, habitual basis will, in most circumstances, render that location a regular workplace of the employee. The fact that the employee may report to that location once or twice each month is of less importance than the regularity of the reporting and the nature of the duties carried out by the employee at that location.

While the situations above are generally personal travel scenarios under a strict interpretation of the law, we would not be opposed to an administrative de minimis test for rare occurrences of personal travel should you determine that this would not hinder your compliance activities in this area. For example, where an employee is only infrequently and irregularly provided with a vehicle by an employer solely for the purpose of specified business travel, such as to meet with an out-of-town client or attend a training course, it would not be objectionable if no amount were included in that employee's income as a result of having taken that vehicle home on the day before the specified business travel and returning it the first morning following the day which concludes business travel. On the other hand, it would not be reasonable to extend this treatment to an individual who has a vehicle available to him or her at all times.

Bryan W. Dath
Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch