Car expenses allowed for employee travelling from home office
In general terms, an employee can deduct car expenses incurred for travelling “in the course of employment”, if that is required under the terms of the employment and the employer provides the employee with a T2200 form. Certain other conditions apply.
Travel “in the course of employment” includes travel from the place of employment to another place of employment (e.g. from one office of the employer to another office). It does not normally include travel from your home to the employer’s office, as that is normally considered personal travel.
In the recent Gardner case, the taxpayer was employed as a sales representative with a company whose office was located in Oakville, Ontario. Her home was about 70 kilometres from the office. In the year in question, she had a home office where she performed about 90% of her employment duties. However, she would also drive to the company’s office for meetings and similar work reasons. She claimed a deduction for her car expenses incurred in driving from her home to the company’s office. The CRA denied the deduction.
On appeal to the Tax Court of Canada, the sole issue was whether the taxpayer’s travel from home to the company office was in the course of employment or personal. The Tax Court Judge allowed the taxpayer’s deduction. The Judge reasoned that travel between places of employment was in the course of employment, because the taxpayer’s home office constituted her main place of employment and the employer required her to work there.
