Hybrid ABC presenter's tax deductions knocked back despite compulsory work‑from‑home orders
The Full Court of the Federal Court has ruled that a Melbourne ABC sports presenter cannot claim income tax deductions for rent on his home office or for car travel between his apartment and the ABC's Southbank studios, in a decision likely to resonate with thousands of hybrid workers.
Justices Thawley, McElwaine, and Wheatley allowed the Commissioner of Taxation's appeal from a 2025 Administrative Review Tribunal decision that had permitted the deductions.
Nathaniel Hall, a sports presenter and producer, performed about 75% of his work – a "Digital Role" – exclusively from the second bedroom of his rented apartment during the 2021 income year, under a combination of ABC and Victorian government COVID‑19 directions.
The remaining 25% – a "Live Role" – had to be done at the Southbank studios, for which he obtained travel permits.
Hall claimed a portion of his rent as a home‑office "occupancy expense" and car expenses using the cents‑per‑kilometre method for trips between home and the studios on days he worked in both locations.
The Commissioner disallowed both claims, but the Tribunal later found in Hall's favour.
Court reaffirms 'essential character' of home rent
The central issue on rent was whether part of the apartment rent, referable to the home office, was deductible under s 8‑1 of the Income Tax Assessment Act 1997.
The Court accepted that the rent had a connection with earning income, but emphasised that the negative limb of s 8‑1, excluding expenditure of a "private or domestic nature," must still be satisfied.
"The mere use of a room in a home for work purposes does not, of itself, transform an otherwise private or domestic expense into a deductible one," Thawley said in the decision.
"The respondent's outgoing was rent incurred to secure and maintain residential premises as a home. The second bedroom remained part of that home. It was not possible to treat each rental payment as two distinct outgoings or two different kinds of expenditure, one with respect to the second bedroom, and one with respect to the rest of the home."
The Court further held that neither practical nor legal compulsion to work from home alters the character of rent: "The essential character of the expenditure was rent paid to secure domestic accommodation. While the prevailing conditions required the respondent to work from home, this necessity did not alter the essential character of the expense."
Commuting in a hybrid role still not deductible travel
On the car expenses, the Court focused on the specific rules for the cents‑per‑kilometre method in s 28‑25 and the definition of "travel between workplaces" in s 25‑100.
That provision expressly excluded travel to or from a place at which the taxpayer resided, meaning Hall could only succeed if the driving was "in the course of… producing [his] assessable income."
The Court found that Hall was not performing either his Digital Role or Live Role while driving.
His trips were "travel 'to' perform income‑producing activities, not travel 'in' performing income‑producing activities."
The journeys therefore remained non‑deductible commuting, even though they linked two different work locations on hybrid working days.
The Court then concluded that the Tribunal had erred in law in allowing a deduction for rent and travel.
The ruling confirms that, for employees, even exclusive and compulsory use of a room as a home office, and hybrid work patterns, will not in themselves convert rent or commuting costs into deductible expenses where their essential character remains private or domestic.
