Edited version of private ruling

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Ruling

Subject: Motor vehicle expenses

Question

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

Answer

No.

This ruling applies for the following period

Year ended 30 June 2010

The scheme commenced on

1 July 2009

Relevant facts

You are an employee.

You are required to carry your protective equipment with you as you sometimes travel from home directly to the site of an incident. At other times, you travel from work to the incident.

You also must carry some personal items in case you are required to stay at the site of the incident.

Your equipment and personal items are carried in a bag.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 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.

Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or because it is not an expense incurred in gaining or producing assessable income.

The case of Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 7 AITR 166; (1958) 11 ATD 404 settled the principle that travel to and from work is ordinarily not deductible. The Full High Court held that costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. The travel is considered to be of an essentially private or domestic nature.

However, the Commissioner accepts that expenses incurred by employees in travelling to and from work are deductible in certain circumstances. One of the exceptions to the general view is where the employee is required to transport bulky equipment necessary for employment. Paragraphs 63 and 64 of Taxation Ruling TR 95/34 explain 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 (Case 43/94), 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 facile transport. 

In your case, you are required to carry protective equipment and personal items in a case which weighs approximately 21.5 kg. Your private items cannot be added to the weight or size when considering the bulkiness of your equipment.

Your case is comparable with Case 43/94, and likewise, your equipment is not of sufficient size or weight to impede facile transport. Therefore, you are not entitled to a deduction for travel expenses between home and work each day.

Please note that travel to and from an alternative place of work is an allowable deduction. This travel is undertaken in the performance of your duties. Therefore when you travel directly to a site and that site is not your normal place of work, then the travel to and from this site is an allowable deduction.