ATO Interpretative Decision

ATO ID 2001/184 (Withdrawn)

Income Tax

• This ATO ID is withdrawn as the interpretative issue is covered in IT 112 and IT 2543
  This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Issue

Can a taxpayer claim a deduction for the cost of using his motor vehicle to transport tools to and from work under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

No, transporting tools where secure storage facilities are provided at the place of work is considered a matter of personal choice. The costs associated with the transporting of these tools are therefore not deductible.

Facts

The taxpayer is a tradesperson. The taxpayer has large toolboxes which are also heavy (weighing in excess of 15 kg). The toolboxes are stored in the taxpayer's motor vehicle.

The employer supplies a secure facility for the storage of staff tools and equipment at the work site. The company owned equipment is stored in the same type of storage facility. The secure storage facilities take the form of a storage box equipped with a securing rod and padlock.

The secure storage facilities have been broken into in the past.

Reasons For Decision

The case of Lunney v. Federal Commissioner of Taxation (1957-1958) 100 CLR 478 settled the principle that travel to and from work is ordinarily not deductible under section 8-1 of the ITAA 1997. This travel is considered to be of an essentially private or domestic nature.

This principle was clarified in FC of T v. Vogt (1975) 5 ATR 274; 75 ATC 4073 (Vogt's Case). In this case, a deduction was allowed because the expense could be attributed to the transportation of bulky equipment (musical instruments) to varying places of work, rather than to private travel between home and work.

The principle was further clarified in Case U107 (1987) 18 ATR 3544; 87 ATC 650. In this case, there was a single place of employment with storage facilities provided at the place of work. The taxpayer chose to take his tools home with him each day, as the storage facilities were not secure. The AAT confirmed the principle in Vogt's Case applied in these circumstances. It noted that the following factors should be considered in transportation of tools cases:

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security of the storage facilities,

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the taxpayer's personal choice to carry the tools (is there a reasonable alternative), and

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The size and weight of the tools and alternative forms of transportation.

These tests have been applied in a number of subsequent cases: Case Z22 92 ATC 230; 23 ATR 1189, Case 43/94 (1994) 29 ATR 1031; 94 ATC 387, Crestani v. Federal Commissioner of Taxation (1998) 40 ATR 1037; 98 ATC 2219, Bajjada v. Commissioner of Taxation [1999] AATA 519, and Millgate v. Commissioner of Taxation[2000] AATA 1040.

In each of these cases, the security of the workplace storage facilities (when it was established the tools were bulky) was the determinative factor. Where there was concern over the safety of the tools in the workplace facility, the deduction was allowed. Where a secure environment was provided (and this did not mean "impregnable"), the deduction was not allowed.

The AAT consistently found that the employment created a need for the taxpayer to transport the tools to and from work where security was inadequate. Where security was adequate, the AAT found that it was the personal choice of the taxpayer to transport the tools to and from home, rather than avail themselves of the facilities.

Legislative References:
Income Tax Assessment Act 1997
   8-1

Case References:
Lunney v. Federal Commissioner of Taxation
   (1957-1958) 100 CLR 478

Keywords
Motor vehicle expenses
Home to work travel expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  10 August 2001

ISSN: 1445-2782