ATO Interpretative Decision
ATO ID 2001/299 (Withdrawn)
Income Tax
Expenses incurred in travelling to and from work - transporting clothesFOI status: may be released
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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Is expenditure incurred by the taxpayer in transporting a change of clothes to and from work an allowable deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No, the expenditure is not an allowable deduction under section 8-1 of ITAA 1997.
Facts
The taxpayer has two separate employers on each working day. On completion of the duties with the first employer (Employer A), the taxpayer commences duty with the second employer (Employer B).
Employer A requires the taxpayer to wear a distinctive uniform which is not suitable for use with Employer B, necessitating a change of clothes prior to commencing duties with the second employer.
The taxpayer uses a motor vehicle to travel between home and work.
Reasons for Decision
Section 8-1 of the ITAA 1997 generally allows a deduction for any loss or outgoing to the extent that it is incurred in gaining or producing assessable income.
It is settled law that expenditure incurred in travelling to and from the normal workplace is not deductible as it is not incurred in, or in the course of, gaining or producing the assessable income. (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478).
A deduction is allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work (FC of T v. Vogt 75 ATC 4073; 5 ATR 274). If however the equipment is transported to and from work merely as a matter of convenience, it is considered that the transport costs are private and no deduction is allowable (Taxation Ruling TR 95/19, paragraph 138).
A deduction is not allowable to the taxpayer because the items of clothing are not considered bulky. Even if they were bulky a deduction would not be allowable because they were transported as a matter of the taxpayer's personal convenience.
Date of decision: 25 July 2001
Legislative References:
Income Tax Assessment Act 1997
section 8-1
Case References:
Lunney & Hayley v. Federal Commissioner of Taxation
100 CLR 478
75 ATC 4073
5 ATR 274
Related Public Rulings (including Determinations)
IT 112
TR 95/19
ATO ID 2001/80
Other References:
CDS 10380
Keywords
Motor vehicle expenses
Travel expenses
Home to work travel expenses
ISSN: 1445-2782
| Date: | Version: | |
| 25 July 2001 | Original statement | |
| You are here | 11 November 2005 | Archived |
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