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Ruling

Subject: Parking expenses

Question

Are you entitled to a deduction for airport parking expenses?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2011

The scheme commenced on

1 July 2010

Relevant facts

You are an employee working at various remote sites.

You are required to carry all your personal protection equipment at all times as you never know which site you will be required at.

Your equipment weighs about 20 kilograms which is carried in two bags. One is a medium size suitcase which also holds personal clothing and the other is a sports bag which holds bulky items.

Your job is fly in/fly out and you leave your car at the airport while working.

You incur parking expenses.

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.

A deduction is generally allowable for parking fees incurred while travelling in circumstances where the travel expenses are deductible.

We therefore, need to consider whether your travel expenses are deductible.

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.

Taxation Ruling TR 95/34 states that there are some situations where it has been accepted that travel by employees between home and work is deductible. These situations are: 

· 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, and

· if you transport bulky equipment that you use in your work and cannot leave at your workplace.

Your work commences at the time you reach the mine site. It is therefore, not commenced at the time of leaving home.

Additionally, even though you are required to work at different locations, your employer provides flights to the different locations. Your only travel is from home to the airport. This is not considered to be itinerant.

The only situation that may apply to you is whether your equipment is considered to be bulky.

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, the equipment you are required to carry weighs approximately 20 kilograms and is carried in two bags. One is a medium size suitcase which also holds personal clothing and some equipment and the other is a sports bag which holds bulky items.

It is not considered that the size and weight of this equipment make it sufficiently heavy or bulky to be regarded as bulky equipment. Therefore, this exception does not apply in your circumstances. Consequently, as your travel expenses from home to the airport are not deductible, you are not entitled to a deduction for parking expenses.