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 employee travel is business/personal where i) the employee is req'd to use the vehicle so that they can be contacted at all times by the employer (vehicle equipped with radio phone) ii) 'ees work primarily in the field and do not report to a place employment -no travel between the place of residence and place of employment iii) 'ee is on call 24 hours a day and iv) 'er does not have a central area where vehicles may be left
Position TAKEN:
i), iii) and iv) constitute personal travel in situations discussed and ii) is a question of fact
Reasons FOR POSITION TAKEN:
911738 921407 912356 ec1522 a-6890ec1189 7-0890
941488
XXXXXXXXXX Sandra Short
Attention: XXXXXXXXXX
September 28, 1994
Re: Personal use kilometres for purposes of calculating standby charge
This is in reply to your letter of June 2, 1994 which requests clarification concerning the meaning of business use of an employer provided automobile so that you may be able to better determine whether certain employees may be entitled to a reduced standby charge. The following information has been provided:
1. XXXXXXXXXX
2.Field staff conduct inspections of all segments of XXXXXXXXXX and are required to respond on a 24-hour basis to XXXXXXXXXX and emergency situations.
3.Each employee has a mobile radio installed in the vehicle provided so that they may be reached at any time on an emergency basis.
4.At certain times of the year, employees are on call 24 hours a day. However, the vehicles are made available for employees ' use throughout the year including the vacation period although an employee may not actually use the employer provided vehicle while taking vacation. The vehicles are not made available to or permitted to be driven by anyone other than the assigned employee unless the employee is present in the vehicle.
5.Field employees are generally located outside of a civic environment. They primarily do not work in an office and do not report to the head office except perhaps by radio communication
6.The employer does not maintain a central location where vehicles can be left at the end of the day.
You have expressed the following views:
A)Since the vehicles are equipped with radio phones, the individual using the vehicle can be contacted at all times by the employer, industry and the public and when the employee is on call that employee must use the vehicle for employment purposes. Therefore, the use of the vehicle, when the individual is on call, constitutes employment or business use and not personal use.
B)The employees work primarily in the field and frequently do not report to a place of employment where their office is located. Since there often is no travel between the place of residence and the place of employment, the use of the automobile by the employee on the road during normal hours of employment would be employment related.
C)Most of the employees have a second car that they own and use for personal use. Employees use the employer-provided vehicle in situations such as going to a restaurant, grocery store, movie theatre or other personally related activities during the day or evening in order to be available for contact by the employer, the industry, and the public should the need arise, through the car phone mechanism. Therefore, when the employee is on call, such use would constitute business use.
D)Since the employer does not have a central area where vehicles may be left and because the employer requires that the individual maintain the vehicle and always be available for duty through the use of the vehicle by means of the mobile phone, this factor adds to the position that the individual is using the car for employment use and not for personal use in almost all circumstances.
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."
Whether an employee's place of work is to be considered a "regular place of work" is a question of fact that can only be determined on a case by case basis upon a review of all the individual's circumstances. While you have indicated that employees work "primarily" in the field and "frequently" do not report to a place of employment where their office is located, individual circumstances would determine whether in fact a given employee could be considered to report "regularly" to one of the field offices or head office or another location. While a regular workplace is usually the location at or from which the employee ordinarily performs the duties of employment, in the case of an employee whose employment duties are itinerant in nature, that is, which require the employee to travel from place to place on a less predictable, sometimes instantaneous, basis, the regular place of work may be the location where the employee returns with some degree of regularity to prepare and/or submit reports, attend staff meetings and so on. The Department has also 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. The criterion used to characterize a second location as a regular workplace is the relative predictability or certainty of the employee reporting to that location on a more or less regularly scheduled basis.
We offer the following general comments as they relate to the views expressed by you in A) to D) above:
A)The fact that an employee returns to his or her residence in an employer-provided vehicle from a regular place of work, but remains on call as part of that employee's employment contract, does not, in our view, change the basic purpose of the trip. Therefore, this travel is considered to be personal. However, should the employee be required to actually use the vehicle to make an emergency call at some location other than a regular place of work such as the field office, this travel is not considered to be of a personal nature.
B)The regular place of work for field employees who travel to various locations would depend on the circumstances of each employee. However, in any case where the employee proceeds directly from home to a point of call (other than the work place to which the employee regularly reports), or returns home from such a point, that travel is considered business use. This does not mean that all travel conducted during normal employment hours can be considered business use. Where an employee travels during the day between work sites, such travel is considered business travel; however, personal travel during the course of the day (such as personal errands or noon meals) remains personal travel and its nature is not changed by virtue of the fact that the travel to the point of call in the morning and the return evening trip is of a business nature.
C)We believe the comments provided in response to A) apply to this situation as well. Employees who are on call 24 hours per day and have a car available for their use at all times are required to compute taxable benefits in the manner discussed in the bulletin.
D)The fact that an employer does not have a central area where vehicles may be left by employees, that employees are required to maintain a vehicle and that employees must be available for duty through the use of a vehicle (means of contact being the mobile radio or phone), does not, in our view, change the basic purpose of any trip made.
We trust that the above comments are of assistance to you.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch
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