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Edited version of private ruling
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Ruling
Subject: Home to work travel
Question
Are you entitled to a deduction for expenses incurred in travelling between home and work during the period you transported equipment and files in order to undertake after hours work required by your employer?
Answer
Yes.
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.
Your employer requested that you work from home after work and on weekends on a project for a short period.
You could not leave the equipment at home as you sometimes had an opportunity to work on it at work as well. You worked for about four to five hours per night and on weekends.
You were required to carry a laptop computer, printer and three or four boxes of files each weighing approximately ten kilograms each home each day to complete the task.
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. Paragraph 63 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, and
· it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice.
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, 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 your case, you are required to carry equipment which weighs in excess of 40 kilograms. Based on your individual circumstances, it is considered that the equipment is bulky and you are not carrying the equipment as a matter of convenience or personal choice.
Therefore, you are entitled to a deduction for motor vehicle expenses for the period you carry the equipment.