Edited version of private ruling

Authorisation Number: 1011586051373

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Ruling

Subject: deductibility of home to work travel

Questions and answers:

1. Are you entitled to a deduction for expenses incurred for travelling between your home and your place of employment when transporting your cooking equipment and uniforms?

Answer: No.

2. Are you entitled to a deduction for expenses incurred when travelling directly from one worksite to another?

Answer: Yes.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

You are employed as a chef.

You are required to travel a number of kilometres to your work place.

You undertake this travel in your privately owned motor vehicle.

Your employer does not provide you with a travel allowance.

Your shift consists of working several days straight followed by a number of days off.

During your shift you are provided with accommodation that you are required to vacate at the end of your shift.

In the future you will be required to relieve at other camp sites. This relief work will require you to travel directly from one work site to another.

As a consequence of your employment you are required to carry your cooking equipment, which includes knives and other cooking utensils and uniforms to cover your shift.

The toolbox that you carry your cooking equipment has dimensions of 500mm x 250mm x 250mm and when fully packed weighs approximately 10 kilograms.

The bag that you carry your uniforms has dimensions of 900mm x 450mm x 300mm and weighs approximately 5 kilograms.

Your employer does not provide you with any storage facility to leave your equipment while you are not working.

You have incurred travel expenses.

You have retained the documentation as evidence.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Income Tax Assessment Act 1997 Section 25-100.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a deduction for all losses and outgoings are allowable to the extent to which they are incurred in gaining or producing assessable income; except where the expenses incurred are capital or private in nature, or relate to the earning of exempt income.

Expenses for travel between a taxpayer's home and their workplace are generally considered to be a private expense that is necessarily incurred to place a taxpayer in a position to perform their income earning activites, rather than in the performance of those activities. (Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478; 11 ATD 404 (Lunney's Case) Taxation Ruling 112).

The mode of transport, the availability of transport, the lack of suitable public transport, erratic times of employment, time of travel, distance of travel, frequency of travel and necessity of travel all are factors which do not alter the essential character of travel between home and work as private in nature. Similarly, the fact that the travel is outside normal working hours or involves a second or subsequent trip does not change this principle (Case V111 88 ATC 712, Taxation Ruling IT 2543).

Bulky equipment

A deduction may be allowable for home to work travel if the transport costs can be attributed to the transportation of heavy, bulky or cumbersome equipment, rather than to private travel between home and work.

To determine whether the equipment you carry is bulky is a question of fact and degree, and consideration must be given to the size and weight of the equipment. Since the income tax law does not define what constitutes bulky equipment we must refer to the relevant case law to assist us.

In Case 43/94 94 ATC 387; AAT Case 9654 (1994) 29ATR 1031 (Case 43/94), the taxpayer, a flight sergeant with the Royal Australian Air Force sought to claim a deduction for the cost of travelling between home and work. He carried his flying equipment in a duffle bag, a navigational bag and occasionally a suit bag. The duffle bag measured 75 centimetres x 55 centimetres x 50 centimetres and when packed weighed 20 kilograms.

The Administrative Appeals Tribunal considered that the duffle bag with its contents was not of a size or weight to impede easy transportation. It was held that the mode of transporting the duffle bag, the navigational bag and the suit bag was simply a consequence of the means adopted in conveying himself to and from his place of employment.

In your case, the dimensions of the toolbox that you use to transport your cooking equipment are 500mm x 250mm x 250mm and when fully packed weighs approximately 10 kilograms and the bag that you carry your uniforms has dimensions of 900mm x 450mm x 300mm and weighs approximately 5 kilograms. Consistent with AAT Case 49/94 (1994) 94 ATC 387, your toolbox and bag would not be considered sufficiently cumbersome or heavy to be viewed as being bulky.

Accordingly, as the work related equipment and uniforms that you transport from your home to work are not considered to be of a bulky nature, you are not entitled to a deduction under section 8-1 of the ITAA 1997, for the expenses incurred in travelling between your home and work.

Travel between places of work

Travel expenses (including motor vehicle expenses) are deductible if they are incurred in the course of a taxpayer's work or business. The purpose of the travel must be examined to determine if the requirements of section 8-1 of the ITAA 1997 are met. In considering the deductibility of travel expenses, a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel that the taxpayer's expenses can be deducted (Taylor v. Provan 1975 AC 194).

Taxation Ruling IT 2199 states that claims for expenses incurred in travelling directly between two places of employment should be allowed where the taxpayer does not live at either place and the travel has been undertaken for the purpose of enabling the taxpayer to engage in income producing activities.

Section 25-100 of the ITAA 1997 provides that for a deduction for travel expenses between workplaces to be allowable, a taxpayer:

· must have been engaged in activities to gain or produce their assessable income at the first workplace; must have travelled to the second workplace for the purpose of engaging in activities to gain or produce their assessable income; and must have engaged in those actives while at the second workplace.

In your case, on occasion you will be required by your employer to relieve at various work sites. In doing so, you will be required to use your own private motor vehicle to travel directly from one work site to another work site where you will further engage in income producing activities. Any travel you undertake directly between workplaces in your private vehicle because the duties of your job require it will be considered to be travel on work.

Accordingly, the expenses you incur for travel directly between two work places while you are relieving at other work sites are deductible under section 25-100 of the ITAA 1997.

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