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Ruling
Subject: Deduction for travel expenses
Question
Are you entitled to a deduction for car expenses for travel between home and work?
Answer
Yes
This ruling applies for the following periods:
Year ended 30 June 2012
Year ended 30 June 2013
Year ended 30 June 2014
Year ended 30 June 2015
Year ended 30 June 2016
Year ended 30 June 2017
The scheme commenced on:
1 July 2011
Relevant facts and circumstances
You are an employee.
It is a condition of your employment that you carry certain items with you when you are carrying out your work duties
Your employer does not provide a secure storage for you to use at work and you take the items home so that you can maintain them.
You transport these items from home to work in a number of cases.
You will claim a deduction for the car expenses using the log book method and you will retain the relevant substantiation required.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Reasons for decision
Section 28-90 of the Income Tax Assessment Act 1997 allows a deduction for car expenses incurred in travelling business kilometres in a car you own or lease using the log book method.
Business kilometres are kilometres travelled in the course of producing your assessable income.
A deduction is generally not allowable for the cost of travel between home and work because the expenses are not considered to be incurred in producing assessable income. These expenses are incurred as a consequence of living in one place and working in another and any expenses incurred to enable a taxpayer to commence their income earning activities are therefore considered private in nature.
However, there are situations where it has been accepted that travel by employees from home to work is deductible:
- the employees home constitutes a place of employment and travel to a work place to continue work
- the employees employment is inherently of an itinerant nature
- travel is between two places of employment, and
- the employee has to transport by vehicle bulky equipment necessary for employment.
In your case it is accepted you are required to carry work equipment between your home and work and that it is of sufficient bulk to characterise the travel as being referable to the carriage of that equipment. You also meet the substantiation requirements of the log book method and accordingly you are entitled to a deduction for the car expenses you incur in respect of transporting this equipment between home and work.
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