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Edited version of private ruling
Authorisation Number: 1011881985816
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Ruling
Subject: Travel expenses
Question
Are you entitled to a deduction for car expenses incurred travelling to and from work to transport your tools?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2010
Year ended 30 June 2011
The scheme commenced on
1 July 2009
Relevant facts
Part of your employment responsibilities includes work that requires you to use very sharp tools.
You carry these tools to and from work daily, so that you can sharpen them at home.
You use your own car as you cannot carry these tools on public transport.
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.
As a general rule, expenditure travelling to and from work is not deductible as the expenses are not incurred in the course of gaining assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities. The travel expenses are generally considered private in nature.
However, a deduction may be allowable if the transport costs can be attributed to the transportation of bulky equipment.
Taxation Ruling TR 95/11, which relates to hospitality industry employees, provides the example of a chef who takes their tools home at the end of each day. The chef is not considered to be transporting bulky equipment and is therefore not entitled to a deduction.
Similarly, in your situation, your tools are not considered bulky. You are therefore not entitled to claim a deduction for your motor vehicle expenses incurred in transporting the tools to and from work.
Further Information
The illegality of carrying tools on public transport, and consequently requiring you to transport them in your car, is not a relevant consideration in determining the deductibility of your car expenses.