Can You Claim Rent or Travel When Working from Home? What the 2026 Hall Case Means for Your Tax Return

The way Australians work has changed significantly since COVID-19. Working from home is now commonplace, but an important question remains: when does your home actually become a workplace for tax purposes, and can travelling from home to another workplace become tax-deductible?

The Hall case provides an excellent example of how difficult that question can be.

In May 2025, the Administrative Review Tribunal handed down a taxpayer-friendly decision allowing an ABC employee deductions for part of his residential rent and certain motor vehicle expenses.

Less than a year later, however, the Full Federal Court unanimously overturned that decision.

Here is what happened and, importantly, what the case means for taxpayers today.

The Background: Two Roles, Two Work Locations

Nathaniel Hall was employed by the ABC as a sports presenter and producer.

During the 2021 financial year, his employment effectively involved two different components.

Approximately 75% of his work was a Digital Role, which involved producing the ABC Sport Digital Radio station. During the COVID-19 restrictions, this work was performed from a spare bedroom in his rented Melbourne apartment.

The remaining approximately 25% was a Live Role, which required him to attend the ABC’s Southbank studios because the work required specialised broadcasting facilities that could not practically be replicated at home.

Importantly, Hall was not simply choosing to work from home for convenience. Government restrictions and his employer’s requirements meant that, for the relevant period, he was required to perform his Digital Role from home.

That distinction became central to the original Tribunal decision.

What Did Hall Claim?

Hall claimed two important deductions.

First, he claimed $5,878.87 of his residential rent, representing approximately 16.18% of his apartment attributable to the second bedroom that he used as his home office.

Second, he claimed motor vehicle expenses for approximately 1,595 kilometres of travel between his home and the ABC’s Southbank studios, together with one work-related journey to AAMI Park.

On the relevant days, Hall would generally commence his Digital Role at home, travel to the studio to perform his Live Role and then return home.

The Commissioner originally disallowed both claims.

Hall challenged that decision.

2025: The Administrative Review Tribunal Sides with the Taxpayer

On 21 May 2025, the Administrative Review Tribunal decided Hall and Commissioner of Taxation [2025] ARTA 600.

The ART found in Hall’s favour and allowed both deductions.

Why Did the ART Allow the Rent?

The Tribunal placed considerable weight on the unusual circumstances surrounding Hall’s home office.

Hall was not working from his spare bedroom merely because it was convenient.

The Tribunal found that the combination of Victorian Government restrictions and the ABC’s requirements meant that Hall effectively had no choice about where he performed his Digital Role.

The evidence established that the spare bedroom was his main workplace for that part of his employment during the relevant year.

The Tribunal therefore accepted the claimed proportion of rent attributable to the home office.

Why Did the ART Allow the Car Expenses?

The travel claim was equally interesting.

The Tribunal accepted that Hall had one employer but two distinct components to his employment, each of which could only be performed at its respective location.

On days when Hall started his Digital Role at home and then travelled to the ABC studio to undertake his Live Role, the Tribunal considered him to be travelling “on work” rather than simply travelling “to work.”

Accordingly, the ART allowed the car expense deduction.

At the time, this was an important decision for employees working from home.

But it wasn’t the end of the story.

The ATO Disagrees and Appeals

The Commissioner did not accept the ART’s reasoning.

In June 2025, the ATO released an interim Decision Impact Statement and confirmed that it was appealing the decision to the Full Federal Court.

Importantly, while the appeal was underway, the ATO maintained its existing position.

The ATO did not accept that merely setting aside a room to work from home during COVID-19 was sufficient to make part of residential rent deductible. It also maintained that performing some employment duties at home did not necessarily make travel from home to a regular workplace deductible.

That appeal produced a very different result.

2026: Full Federal Court Overturns the ART Decision

On 10 April 2026, the Full Federal Court unanimously allowed the Commissioner’s appeal in Commissioner of Taxation v Hall [2026] FCAFC 43.

The Court consisted of Justices Thawley, McElwaine and Wheatley.

The result was effectively reversed: neither the claimed proportion of rent nor the car expenses were deductible.

1. The Rent Was Still Private or Domestic

One of the most important aspects of the Full Court’s decision concerned the character of Hall’s rent.

The ART had effectively separated the rent attributable to the second bedroom from the remainder of the apartment.

The Full Federal Court rejected that approach.

The Full Federal Court looked at the rent differently from the ART. Hall rented a two-bedroom apartment as his home and paid rent under one residential lease. Although he used the second bedroom exclusively for work, the Court did not accept that part of the rent could simply be separated and treated as a work expense.

This is what makes the case particularly interesting. Hall was not working from home simply because it suited him. He was required to work from home, around 75% of his duties were performed there, and the second bedroom was used exclusively as his office. On the face of it, there was a strong connection between that room and his employment.

But that connection was not enough. The Court’s view was that the rent was still, at its heart, the cost of providing Hall with a place to live. Section 8-1 does not allow an expense just because there is a connection with earning income. If the expense is still private or domestic in nature, the deduction can be denied.

So, even though Hall could show that he genuinely needed the second bedroom for work, that did not turn part of his residential rent into a deductible employment expense.

In simple terms: dedicating part of your home exclusively to work does not necessarily convert part of your residential rent into a deductible employment expense. The character of the overall outgoing remains critical.

2. Travelling From Home to the Studio Was Not Deductible

Hall argued that he was travelling between two places of work. He would perform his Digital Role from home and then travel to the ABC studio to perform his Live Role. The ART initially accepted this argument and allowed the deduction.

The Full Federal Court took a different view. When Hall finished his Digital Role at home, that part of his work had ended. He then drove to the studio, and his Live Role did not start until he arrived there.

In other words, he was not working while he travelled. He was travelling to get to the place where his next work duties would begin. That made the journey ordinary home-to-work travel rather than deductible work-related travel.

This is an important distinction. Simply doing some work from home before going to your regular workplace does not turn the trip into a tax-deductible journey. There needs to be a much stronger connection between the travel itself and the performance of your employment duties.

For example, travel may be deductible where your job requires you to travel from one workplace to another during the working day, or where travelling itself forms part of your employment duties. But merely starting work at home and then driving to your regular workplace is generally not enough.

What About the High Court?

This is an important distinction.

The 2026 decision was made by the Full Federal Court of Australia, not the High Court of Australia. However, in reaching its decision, the Full Federal Court considered earlier High Court authorities dealing with deductions, home-office expenditure and the private or domestic nature of expenses.

The ATO’s Decision Impact Statement considers the Full Court’s reasoning to be consistent with the established approach to determining the character of home-office occupancy expenditure.

As of August 2026, the Full Federal Court’s decision in Hall remains the current judicial authority on the issues considered in the case.

What Does Hall Mean for People Working from Home?

The most important lesson is that working from home does not automatically turn your home into a tax-deductible workplace.

Similarly, starting your working day at home does not automatically mean that travelling from home to your employer’s regular workplace becomes deductible business travel.

The character of the expense and the particular circumstances remain critical.

Employees may still be entitled to deductions for eligible working-from-home running expenses, such as electricity, internet, stationery and other qualifying expenses, subject to the applicable ATO methods and substantiation requirements.

However, occupancy expenses such as residential rent are a different matter, and employees should not assume that dedicating a room exclusively to employment makes a proportion of their rent deductible.

The same caution applies to motor vehicle expenses. Ordinary travel between home and a regular workplace generally remains private, even where some employment duties are performed from home.

The Bigger Lesson from Hall

There is another important lesson in this case that goes beyond working-from-home deductions.

A Tribunal decision is not necessarily the end of a tax dispute.

The ART’s May 2025 decision attracted considerable attention because it appeared to provide greater scope for employees in particular circumstances to claim home-office occupancy and travel expenses.

The Commissioner appealed.

Less than 12 months later, the Full Federal Court unanimously overturned the relevant findings.

For taxpayers and advisers, Hall demonstrates why recent tax cases need to be considered not only when they are first decided, but also as they progress through the appeal process.

Key Takeaway

The current position following Commissioner of Taxation v Hall [2026] FCAFC 43 is clear: simply working from home does not make part of your residential rent deductible, nor does it automatically make subsequent travel from home to your regular workplace deductible.

Whether an expense is deductible depends on its character and its connection with the taxpayer’s income-producing activities.

Before claiming significant home-office occupancy or motor vehicle expenses, particularly where the circumstances fall outside the ATO’s standard guidance, taxpayers should obtain professional advice based on their individual circumstances.

FAQ

Q: Can I claim car expenses for driving between my home office and my employer’s office?

A: Generally, no. The Full Federal Court in FC of T v Hall confirmed that simply performing employment duties from home does not make subsequent travel to your regular workplace deductible. Simply starting your workday at home, such as answering emails or attending online meetings, will generally not turn the subsequent trip to your regular workplace into deductible work-related travel.

Q: When am I allowed to claim work-related car expenses?

A: You may be able to claim eligible work-related car travel, using either the cents-per-kilometre method or the logbook method, when you drive:

• directly between workplaces as part of performing your employment duties, for example from Client A to Client B;
• from your regular workplace to an alternative work location, such as attending a work-related meeting, seminar or supplier visit, and back;
• from home to an alternative work location where your employment duties require the journey, subject to the particular circumstances; or
• on genuine work-related errands or client visits required as part of performing your employment duties.

Q. If I have a room used 100% as a home office, can I claim part of my rent?

For an employee, generally not simply because a room is used exclusively for work.

This was an important part of Hall. Even though Hall used the second bedroom as his office and was required to work from home, the Full Federal Court found that his residential rent remained private or domestic in nature.

Different considerations can apply where part of a home genuinely has the character of a place of business, particularly for some self-employed taxpayers.

Q. What is the difference between travelling “to work” and travelling “on work”?

Travelling to work generally means travelling to get yourself to the place where you will perform your employment duties. This is ordinarily private travel.

Travelling on work means the travel itself occurs as part of performing your employment duties and may be deductible depending on the circumstances.

This distinction was central to Hall. His home-based duties had finished before he travelled to the studio, and his Live Role did not commence until he arrived. He was therefore travelling to a place where his next duties would be performed, rather than travelling in the course of performing those duties.

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