Edited version of your private ruling

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Ruling

Subject: Work related expenses

Question

Are you entitled to a deduction for the expenses you incur for travel between home and work?

Answer

Yes

This ruling applies for the following period

Year ending 30 June 2012

The scheme commenced on

1 July 2011

Relevant facts

The arrangement that is the subject of the private ruling is described below. This description is based on the following documents. These documents form part of and are to be read with this description. The relevant documents are:

· the application for private ruling,

· supporting documents for the private ruling request including,

· copy of your work manual.

You are an employee driver.

It is a necessity for you to carry personal protection equipment (PPE) and other documentation with you at all times.

You carry your PPE, toolbox and portable fridge to and from work in your vehicle each day.

You also carry an overnight bag, swag and pillows when required to travel overnight. The total weight of all this equipment is over 60 kilograms (kg).

The equipment cannot be left at work because other employees use the work vehicle.

You are required to carry at all times safety equipment and other documentation in respect of your work duties.

You are not provided with any secure lock up facilities to store your equipment

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 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, or relate to the earning of exempt income.

A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel 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. (see paragraph 77 of Taxation Ruling TR 95/34)

However, there are situations where it has been accepted that travel by employees from home to work is deductible. These exceptions include:

· where the employment can be construed as having commenced at the time of leaving home, for example a doctor on call

· where you travel between home and shifting places of work, that is, an itinerant occupation,

· the transportation of bulky equipment in some circumstances.

In your situation, your work has not commenced before leaving home and you are not considered itinerant. You do carry some work equipment while travelling, therefore the issue of bulky equipment will be addressed further.

In the case of bulky equipment, the cost is attributed to the transportation of the bulky equipment rather than private travel between home and work where the transportation of the equipment is essential and is not done as a matter of personal choice or convenience and there is no secure storage provided at the workplace.

In FCT v. Vogt 75 ATC 4073, 5 ATR 274, a professional musician was allowed deductions for motor vehicle expenses incurred by him in travelling between his place of residence and the various places at which he performed. The taxpayer in this case earned his income by performing at several places, on musical instruments and associated equipment on terms that he brought the instruments and equipment to the place of performance; the instruments and equipment were of substantial value; they were of a bulk which meant they could be transported conveniently only by the use of a motor vehicle; the taxpayer kept the instruments and equipment at his residence for justifiable reasons of convenience and for the purposes of practising on them. The Court held that the essential character of the expenditure was such that it should be regarded as having been "incurred in gaining or producing the assessable income".

The Administrative Appeals Tribunal in Crestani v. FC of T 98 ATC 2219; 40 ATR 1037 found the taxpayer's toolbox was bulky and cumbersome. In this case the taxpayer was an aircraft engineer who worked at Sydney Airport. They transported their toolbox home at the end of each shift as there was no secure storage at work and the tribunal held that the home to work travel was attributed to the transportation of these tools. They found that the toolbox '…is not easy to lift, and could not…conveniently be carried for any distance'. The expenses incurred in transporting these tools were deductible and the taxpayer was simply one of those fortunate few who are able to hitch a free ride on his tool box.

In your circumstances, it is accepted that your equipment is sufficiently bulky and there is no secure place at work to store the equipment. Your travel between home and work is attributed to the carriage of your work equipment. You are therefore entitled to a deduction for the cost of this travel.

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