The ATO has finalised its Decision Impact Statement following its successful appeal in FC of T v Hall [2026] FCAFC 43, a case concerning the deductibility of home office occupancy expenses and home-to-work travel expenses incurred during the COVID-19 lockdowns.

The taxpayer, an ABC sports producer, claimed deductions for a portion of the rent paid on his Melbourne residence and for car expenses incurred travelling between his home and workplace. The Administrative Review Tribunal initially allowed the claims, but the Full Federal Court reversed that decision.

The Full Court held that the rent expenses retained their essential character as private or domestic expenditure and were therefore not deductible under s 8-1 of the ITAA 1997. Similarly, the travel expenses remained non-deductible home to work travel, as they were incurred to place the taxpayer in a position to earn income rather than in the course of earning it.

In the DIS, the ATO states that the decision supports its existing views on the deductibility of occupancy expenses and work-related travel expenses. The Commissioner is reviewing whether updates are required to TR 93/30, TR 2021/1 and related employee guidance to reflect the Full Court’s reasoning.

Importantly, the ATO emphasises that an employer requirement to work from home, or the practical necessity of doing so during the pandemic, does not of itself make occupancy expenses deductible. The key question remains whether part of the home has the character of a place of business, rather than merely being a location from which work is performed.

The ATO also reiterates that performing some employment duties at home will not ordinarily convert travel between home and a regular workplace into deductible travel. Such expenses generally remain a prerequisite to commencing income-earning activities and are therefore private in nature.

The DIS confirms that the extraordinary circumstances of the COVID-19 pandemic did not alter these established principles governing the deductibility of home office occupancy costs and home-to-work travel expenses.

Commissioner of Taxation v Hall [2026] FCAFC 43 (Published 17 June 2026) | Legal database