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Ruling

Subject: Deduction for travel expenses

Question

Are you entitled to a deduction for travel expenses incurred for travel between your home and your work place?

Answer

No.

This ruling applies for the following periods

Year ending 30 June 2012

Year ending 30 June 2013

Year ending 30 June 2014

Year ending 30 June 2015

The scheme commences on

01 July 2011

Relevant facts and circumstances

Your employer provides you with uniforms and a security card attached to a lanyard and you are responsible for the safekeeping of these items.

You are not able to leave your uniform at work and therefore you take it home with you for safekeeping.

Your employer requires that you take home your security card as you are responsible for it at all times.

Your circumstances are that you are not:

· using your home as a base of employment,

· shifting places of employment each day,

· travelling between two separate places of employment,

· travelling between your normal workplace and an alternative workplace,

· required to carry bulky tools or equipment for use at work.

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.

Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example unless a person arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166 (Lunney's Case)).

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, rather than in 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 situations 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, and

· 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 is to be considered. The question of what constitutes bulky equipment is a question of fact and must be considered according to the individual circumstances of each case.

The question of what constitutes bulky equipment was considered in Case 43/94 94 ATC 387; AAT Case 9654 (1994) 29 ATR 1031 a flight sergeant with the Royal Australian Air Force was denied a deduction for the cost of transporting his flying suit and other items used for work purposes. The items were carried in:

· a duffle bag measuring 75cm long x 55cm wide x 50cm deep and weighing 20 kilograms when packed

· a suit bag which weighed 10 kilograms when packed, and

· a briefcase sized navigational bag which contained charts, work manuals and study materials.

It was held that the travel was private in nature and the items were not sufficiently bulky to impede easy transport. It was held that the mode of transporting the duffle bag, the navigational bag and the suit bag was simply a consequence of the means adopted in conveying himself to and from his place of employment.

In your situation, you take your uniform for the day and a security pass on a lanyard. We consider what you carry is not sufficiently cumbersome or heavy to be considered bulky. Based on the decisions in Case 43/94 your equipment is not considered to be of a size or weight that would make their transportation difficult.

Therefore, your equipment is not considered to be of such bulk that it would change the primary purpose of your journey from one of transporting yourself to and from work to one of transporting the equipment.

Your travel expenses are of a private nature and are incurred as a necessary consequence of living in one place and working in another (Lunney's Case).

Therefore, they are not incurred in gaining or producing your assessable income and are not deductible.