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Ruling

Subject: Work related expenses

Question and answer

Are you entitled to a deduction for home to work travel expenses?

No.

This ruling applies for the following period:

Year ending 30 June 2013

Year ending 30 June 2014

Year ending 30 June 2015

Year ending 30 June 2016

The scheme commenced on:

1 July 2012

Relevant facts and circumstances

You are a professional.

You are based at work point Y and this is your usual place of work.

You are required to work at work point Z from time to time when the need arises.

You may be required to work from work point Z as many as X per year. In the last financial year you worked at work point Z X times.

You are notified of your work at work point Z at the beginning of each month 7 days in advance of you being required to work there.

You are required to transport many items to each of your shifts.

You carry the items in 2 bags.

The first bag used to carry items:

Weight about 7kg

Height about 30cm

Length about 30 cm

Width about 20 cm

Has a number of work specific items in it.

Second bag:

Weight about 11kg

Height about 50cm

Length about 35cm

Width about 25cm

A number of personal items.

The above items in bag 2 are required whether or not your shift involves an overnight stay.

You have access to a room which is shared with other employees.

This room is not secure and you are not able to store your belongings in the room.

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.

However, a deduction is generally not allowable for travel between home and a regular place of work as this travel is not undertaken in the course of producing your assessable income and is private in nature. The cost of travelling between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties.

An exception to the deductibility of home to work travel is where a taxpayer's work is itinerant. The Commissioner's view as regards to when a taxpayer's work would be considered itinerant is contained in Taxation Ruling TR 95/34.

TR 95/34 sets out the following characteristics as being indicators of itinerancy:

a) travel is a fundamental part of the employee's work;

b) the existence of a 'web' of work places in the employee's regular employment, that is, the employee has no fixed place of work;

c) the employee continually travels from one work site to another;

d) other factors that may indicate itinerancy (to a lesser degree) include:

i. the employee has a degree of uncertainty of location in his or her employment (that is, no long term plan and no regular pattern exists)

ii. the employee's home constitutes a base of operations

iii. the employee has to carry bulky equipment from home to different work sites

iv. The employer provides an allowance in recognition of the employee's need to travel continually between different work sites.

Whilst the above characteristics are not exhaustive, they provide guidelines for determining whether an employee's work is itinerant. It is considered that no single factor on its own is necessarily decisive.

Taxation Ruling TR 95/19, which deals specifically with employees of the airline industry, considers the deductibility of home to work travel. It reinforces the aforementioned principle in Lunneys Case when it states the following:

'Travel between home and work: Generally, a deduction is not allowable for the cost of travel between home and the normal work place as it is considered to be a private expense. The fact that travel is outside normal working hours or involves a second or subsequent trip does not change this principle. This principle is not altered by the performance of incidental tasks en route (paragraphs 134 to 137)'

In your case your usual place of work is at work point Y.

You are required from time to time to work at work point Z.

You are notified of the requirement to work at work point Z when your monthly roster is issued to you and you are given 7 days notice of this requirement.

You are not entitled to deduct the costs of your travel from your home to work point Z as you do not have a web of work places, travel is not a fundamental part of your work duties, your home does not constitute a base of operations, you do not have uncertainty in relation to your work location and you do not have continual travel between work places.

The Commissioner accepts that expenses incurred by employees in travelling to and from work are deductible in circumstances where employees are required to transport bulky equipment necessary for their employment. Paragraphs 63 and 64 of Taxation Ruling TR 95/34 explains that a deduction may be allowed in circumstances where:

· the cost can be attributed to the transportation of bulky equipment rather than to private travel between home and work

· it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice, and

· There are no secure facilities available for storage of the bulky equipment at the work place.

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 (Crestani's Case), 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 Case 43/94 94 ATC 387; AAT Case 9654 (1994) 29 ATR 1031, the taxpayer, a flight sergeant with the Royal Australian Air force, was denied a deduction for the cost of transporting items required to and from work in a duffle bag, a briefcase sized navigational bag and on occasions a suit bag. The duffle bag when packed weighed 20 kilograms and measured 75cm long, 55 cm wide and 50 cm deep. The suit bag weighed 10 kilograms. It was considered that the duffle bag was not of sufficient size or weight to impede public transport.

In your case, you are required to transport two bags with you for each work shift. Based on your individual circumstances, it is not considered that the equipment is sufficiently cumbersome or heavy to be considered bulky. It is in fact, less than the equipment carried in Crestani's Case. The first bag which is used to carry items required for your work duties is not considered to be to heavy or bulky to be taken to each shift.

The second bag which contains items such as gym clothing, make-up pyjamas etc is considered to be personal in nature and therefore does not meet the requirements for bulky equipment.

Therefore, you are not entitled to a deduction for home to work travel in relation to the bags you carry with you for each shift.

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