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Edited version of private ruling
Authorisation Number: 1011551667009
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Ruling
Subject: Motor vehicle expenses
Question
Are you entitled to a deduction for travel from work to a seminar, back to home and then to work the next day?
Answer: Yes.
This ruling applies for the following period
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
The scheme commenced on
1 July 2009
Relevant facts
You are an employee.
You organise and are required to attend approximately ten seminars per year for work purposes.
You load up the equipment which weighs approximately 50 kilograms.
You then travel from work to the seminar and return to your home afterwards.
You then take the equipment with you to work the next day and unload it and leave it at work.
Your employer pays you a 'cents per kilometre' rate for part of the trip.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) deals with general deductions and allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature.
Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or because it is not an expense incurred in gaining or producing assessable income.
The case of Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 7 AITR 166; (1958) 11 ATD 404 settled the principle that travel to and from work is ordinarily not deductible. The Full High Court held that costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. The travel is considered to be of an essentially private or domestic nature.
However, the Commissioner accepts that expenses incurred by employees in travelling to and from work are deductible in certain circumstances. One of the exceptions to the general view is where the employee is required to transport bulky equipment necessary for employment.
The question of what constitutes bulky equipment must be considered according to the individual circumstances in each case. To establish if the equipment you carry is bulky, consideration must be given to its size and weight.
In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037, a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered as bulky, in the sense of cumbersome, and the transport cost was attributable to the transportation of such bulky equipment rather than private travel between home and work. The employer did not provide a secure storage area for the toolbox and the use of public transport was not a viable option.
In your case, you are required to carry equipment which weighs approximately 50 kg to the seminars which you load in your car at work, travel to the seminar; return to your home; then return the equipment to work the next day.
Based on your individual circumstances, it is considered that the equipment is bulky.
Therefore, you are entitled to a deduction for motor vehicle expenses for the trip from when you load the equipment until you return it to work.
Division 28 of the ITAA 1997 allows a deduction for car expenses when your car is used in the course of producing your assessable income. You may use one of the four methods outlined in Division 28 to calculate your work related car expenses.
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