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Edited version of private ruling

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Ruling

Subject: Work related expenses-Parking fees

Question 1

Are you entitled to claim a deduction for car parking expenses on days that you are parked near your place of employment for more than four daylight hours?

Answer

No.

Question 2

Are you entitled to claim a deduction for car parking expenses on days that you are parked near your place of employment for four daylight hours or less?

Answer

Yes.

This ruling applies for the following period

Year ending 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

Your employer provides you with the use of a company vehicle.

The vehicle is a station wagon with less than 1 tonne carrying capacity.

Your employer pays for all expenses (including fuel and repairs) except for parking fees.

Your employer requires you to park the vehicle near the office on working days ,so it can be used by you or other employees to travel to another work site.

Your employer is unwilling to provide parking for the vehicle or pay for parking.

There is no free parking near the office.

Your employer requires you to frequently travel to another work site.

On some days the vehicle may not be used to travel to another work site.

You incur parking expenses in parking your company vehicle near the business premises during the work day.

This vehicle is garaged by you at your place of residence.

You do not use the vehicle for personal use.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Income Tax Assessment Act 1936 Section 51AGA.

Fringe Benefits Tax Assessment Act 1986 Section 136.

Reasons for decision

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

Section 51AGA of the Income Tax Assessment Act 1936 specifically deals with the deductibility of car parking expenses and provides that a deduction will not be allowed to an employee for car parking expenses incurred on a particular day if, on that same day:

Section 136 of the Fringe Benefit Tax Assessment Act 1986 provides that primary place of employment means the employers business premises, or associated premises, from which or at which the employee performs duties of his or her employment. This section also provides that daylight period means so much of a period of time as occurs between 7.00am and 7.00pm on the same day.

All periods of parking between 7am and 7pm must be added together to determine whether the four-hour threshold is met. If employees regularly leave and return to their primary place of employment during a day, all the periods must be aggregated to determine whether the total duration of parking exceeds four hours on that day. Any part of a period outside 7am or 7pm will be ignored with only the time during those hours being counted.

In your case, your employer provides you with the use of a company vehicle, which is used to travel between your home and employers business premises. This vehicle is garaged at your home at the end of each day.

Whilst at work, you incur parking expenses as you need to park the vehicle close to your work. You require easy access to the vehicle so you or other employees are able to use the vehicle to travel to another work site.

On those days where you are parked for a total of more than four daylight hours, the conditions of section 51AGA of the ITAA 1936 are met, and you are therefore prevented from claiming a deduction for the parking fees under section 8-1 of the ITAA 1997.

Additional information

Where you claim a deduction for parking expenses, that is, where the car is parked for four or less daylight hours, you must have and retain the relevant written evidence.

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