Edited version of your private ruling

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Ruling

Subject: work related expenses

Question 1

Are you entitled to a deduction for the cost of hepatitis vaccinations?

Answer

No.

Question 2

Are you entitled to a deduction for the cost of sunglasses?

Answer

No.

Question 3

Are you entitled to a deduction for the cost of sunscreen after the apportionment for private use?

Answer

Yes.

Question 4

Is your travel as a security guard considered to be itinerant work?

Answer

No.

Question 5

Are you entitled to a deduction for a parking fine?

Answer

No.

Question 6

Are you entitled to a deduction for a parking fee when parking at your normal rostered work place?

Answer

No.

Question 7

Are you entitled to a deduction for a parking fee when after commencing normal rostered work you are required to travel and park at another venue for work?

Answer

Yes.

Question 8

Are you entitled to a deduction for a penalty imposed under a Liquor Act?

Answer

No.

Question 9

Are you entitled to a deduction for the cost of a GPS navigator after the apportionment for private use?

Answer

Yes.

This ruling applies for the following periods:

Year ending 30 June 2012

Year ending 30 June 2013

The scheme commenced on

1 July 2011

Relevant facts and circumstances

You are employed as a security guard. You have incurred expenses for;

· Hepatitis vaccinations

· Sunglasses (purchased February 2011) and sunscreen

· Travel to and from work

· Travel between places of work

· Parking at work

· Parking fine

· Penalty imposed by a Liquor Act

· Purchasing a GPS navigator

You do not have a set place of work and you are given a schedule each week advising the locations that you will be required to attend. You normally have one venue in a day but you also are directed to one-off jobs at different locations. You do not use your vehicle as patrol security.

A typical week of work is;

Thursday 8pm to early morning

Friday 5 pm to early morning

Saturday 9pm to early morning

Sunday 5 pm to early morning

Monday 10pm to early morning

Sometimes your work place is changed at the last minute, either before or after commencing a shift. Occasionally you have jobs outside these hours at outside venues. You are not paid for the time driving between venues when this happens and you do not keep a record of the kilometres travelled. You do not return home when the employer requires you to travel to another venue.

You are required to attend various venues at least twice a week and pay $18 per night. If you are directed to another area you pay $25 per night. When you try to avoid the higher rate and park on the street you incur a parking fine.

You received and paid a fine from the Licensing board for not correctly filling out the security register at a venue.

You purchased a GPS navigator in late 2011 for $100 to assist travel between unfamiliar venues and for private purposes.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 25-100

Income Tax Assessment Act 1997 section 26-5

Income Tax Assessment Act 1997 Division 40

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 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.

Vaccinations

Generally, a deduction is not allowable for the cost of vaccinations to protect against infectious diseases in the work place as this is a personal medical expense and, therefore, of a private nature.

In Mansfield v. FC of T 96 ATC 4001; (1995) 31 ATR 367 the Federal Court of Australia decided that expenses of a private or personal nature may be an allowable deduction where the working environment is sufficiently abnormal and unique as to make the essential character of the expenditure work-related rather than private in nature. However, whether such an expense is either private or work related involves questions of fact and degree, and something out of the ordinary is usually necessary for the essential character of the expenditure to be seen as work related.

Taxation Ruling TR 95/8 states that a deduction is not allowable for the cost of vaccinations to protect cleaners at risk from infectious diseases in the work place as the expense relates to a personal medical expense, and is therefore of a private nature.

Taxation Ruling TR 95/15 states that a deduction is not allowable for the cost of vaccinations to protect nursing employees against the risk of contracting infectious diseases in the work place as the expense relates to a personal medical expense, and is therefore of a private nature.

Your circumstances are similar to those found with cleaners and nurses who are at risk from infectious diseases. We acknowledge that without the injections you risk contracting an infectious disease at work. However, the essential character of the expense relates to a personal medical expense, and is therefore of a private nature.

Consequently, you are not entitled to claim a deduction for the cost of the vaccinations.

Sunglasses and sunscreen

Expenditure on sunglasses and sunscreen has been held to be deductible for a range of taxpayers who were required, as part of their duties, to work outside in the open air exposed to sunlight Morris v FC of T (2002) ATC 4404; (2002) 50 ATR 104. The Commissioner has accepted that this decision applies to taxpayers who are required to work in the sun for sustained periods for all or part of the day, for example people involved in building and construction, delivery and courier services and other outdoor services. However, it would not apply where an office worker is simply required to take a short walk between office premises.

An example where deductibility would not be allowed is shown in TR 2003/16;

Alison is an office worker. Her employer's offices are located in two buildings, a short walk apart. She wears sunglasses when walking to the other office. The facts in Alison's case indicate that the risk of illness from the environment in which she works is not sufficient to make it necessary for her to use protective items to counter that risk. Consequently, there is not the necessary connection between Alison's expenditure on the sunglasses and her income earning activities. Any protection provided by the sunglasses is not incidental and relevant to her income earning activities. Therefore Alison cannot claim a deduction for the sunglasses.

If the walking distance between the offices was sufficient to require Alison to take protection from the sun, she would be able to claim a deduction for the protective items. An indication that there was a sufficient requirement for Alison to take protection when walking between the offices would be that, in addition to wearing sunglasses, Alison also found the need to apply sunscreen lotion and to wear a hat.

Taxation Ruling TR 94/26 sets out the view of the ATO on the interpretation of section 8-1 of the ITAA 1997. It specifies that a deduction is available in the year of the outgoing. You purchased your sunglasses in February 2011 and therefore no deduction is available in the 2011-12 year of income.

Your working arrangements are mainly conducted within inside venues during the non-sunlight hours. Therefore the deductibility for the cost of sunscreen is limited to apportionment of cost between private use and when the sunscreen is used as a protective item in earning assessable income during daylight hours.

Travel to and from work

Expenses incurred for travelling between home and place of work, are generally not deductible as they are considered to be private expenditure Federal Commissioner of Taxation v. Lunney (1958) 100 CLR 478; (1958) 11 ATD 404. Taxation Ruling TR 95/34 explains that the cost of travel between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in performance of those duties.

However, there are situations where it has been accepted that cost of travel by employees from home to work is deductible. Taxation Ruling IT 2543 summarises these situations as follows:

· the taxpayers home constitutes a place of employment and travel is between two places of employment or business

· the taxpayers employment can be construed as having commenced before or at the time of leaving home

· the taxpayer has to transport by vehicle bulky equipment necessary for employment

· the taxpayers employment is inherently of an itinerant nature, or

· the taxpayer is required to break their normal journey to perform employment duties (other than including incidental duties such as collecting newspapers, mail, etc.) on the way from home to the usual place of employment, or from the place of employment to home.

In your case:

· your home does not constitute a place of employment as you do not work from home

· your employment commences when you reach your workplace and not at the time of you leaving home

· you do not carry bulky work related equipment in your car, and

· you do not break your journey for work purposes when travelling to and from your employment.

Therefore, the only situation that may apply in your case is the itinerant nature of the work.

The question of whether an employee's work is itinerant is one of fact, to be determined according to individual circumstances. It is the nature of each individual's duties and not their occupation or industry that determines if they are engaged in itinerant work. Further, itinerant work may be a permanent or temporary feature of an employee's duties.

The indicators of itinerancy as set out in TR 95/34 are:

· travel is a fundamental part of the employees work.

· the employee has no fixed place of work and there is a web of work places in the employees regular employment

· the employee must regularly work at more than one work site before returning to his or her usual place of residence

· there is a degree of uncertainty of location in the employees employment and no regular pattern, and

· the employer provides an allowance in recognition of the employees travel needs.

Although you may be required to travel to more than one location to perform your duties on some days, it cannot be said that travel is an essential feature of your work duties as a security guard. Your security duties only commence when you reach the work site.

Your employer has several clients where you are required to work. You are provided with a weekly roster of work sites that you are required to attend. There does not appear to be any degree of uncertainty as to the location of your work assignments. Additionally, based on the work schedule provided, you cannot be considered to be regularly working at more than one work site before returning to your usual place of residence.

Although an employee may perform duties at more than one location, this fact in itself may be insufficient to constitute a 'web' of workplaces. Each work site may be regarded as a regular or fixed place of employment. In your case, each work site to which you are assigned is considered to be your regular place of employment.

In view of the above, you are not engaged in itinerant work and the travel undertaken by you between your home and the work sites is normal travel to and from work. Therefore, as the cost of this travel is private expenditure, no deduction is allowable under section 8-1 of the ITAA 1997.

Travel between different work sites

A deduction for travel expenses between two places of employments is allowable under section 25-100 of the ITAA 1997 provided that you meet all the following criteria:

· you earn assessable income at both workplaces

· you travel directly between workplaces

· the purpose of the travel between workplaces is for you to earn assessable income at the second workplace

· you do not reside at either workplace

· at the time of your travel between workplaces, you have not permanently ceased earning income at the first workplace, and

· your travel expenses are not capital or of a capital nature.

On the occasions that your employer requires you to travel to another location after you commence work at the rostered location you would satisfy the above criteria. Therefore the cost of travel between the various work sites on a given day is deductible under section 25-100 of the ITAA 1997 where you are required to perform your duties at several different locations on the same day. You should ensure you keep records of any travel between worksites showing places travelled between, kilometres travelled and date of travel.

Parking fine

Section 26-5 of the ITAA 1997 states that you cannot deduct a loss or outgoing by way of a penalty issued under an Australian law. Taxation Ruling TR 95/14 disallows parking fines as a penalty imposed under an Australian law and therefore is not a deductible expense to you.

Parking fees and tolls

Paragraph 173 and 174 of TR 95/14 state;

A deduction is allowable for parking fees (but not fines) and tolls if the expense is incurred while travelling:

(a)  between two separate places of work;

(b) to a place of education for self education purposes (if the self education expenses are an allowable deduction); or

(c) in the normal course of duty and the travelling expenses are allowable deductions.

This is supported by Case Y43 91 ATC 412; AAT Case 7273 (1991) 22 ATR 3402.

A deduction is not allowable for parking fees incurred when employee teachers are travelling between their home and their normal place of employment. The cost of that travel is a private expense and the parking fees and tolls therefore have that same private character. A deduction is allowable for parking fees and tolls if the travel is not private, e.g., travel between home and work - transporting bulky equipment or transporting students, travel between two separate work places if there are two separate employers involved, travel from the normal work place to an alternative work place while still on duty and back to the normal work place or directly home, travel from home to an alternative work place for work related purposes and then to the normal work place or directly home, travel between two places of employment or between a place of employment and a place of business (paragraphs 132 to 155).

In your case your travel to your normal rostered place of duty is considered to be private in nature and therefore the parking costs are also considered to be private and not deductible. On the occasions when you are required to travel between two places of employment, such as when you start at the rostered place of work and then are directed to another place of work, the parking fees at the second place of work would be deductible as the travel expense would also be deductible.

Penalty imposed by a Liquor Act

Section 26-5 of the ITAA 1997 states that you cannot deduct a loss or outgoing by way of a penalty issued under an Australian law. In your case a penalty was issued under the Liquor Act. As this penalty has been issued under an Australian law no deduction is available.

Purchasing a GPS navigator

A GPS navigator with a value greater than $300 would generally be a depreciating asset under Division 40 of the ITAA 1997. For amounts less than $300 there would be an immediate deduction if there is any deductible travel. In your case the deductible travel would normally be when you commence work in your normal rostered location and then are directed to another location to perform your duties on the same day. The amount of the deduction must be reduced by the portion attributable to private and other non-taxable purposes.