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Ruling

Subject: Work-related motor vehicle expenses

Question:

Are you entitled to claim work-related motor vehicle expenses between home and work when you are required to carry bulky equipment required for your employment?

Answer:

Yes

This ruling applies for the following periods:

Year ending 30 June 2011

The scheme commences on:

1 July 2010

Relevant facts and circumstances

You are an employee. On all occasions your employment duties begin at the work location.

You are usually away from home for a period of several days when you carry out your duties and take the following items with you:

                          Weight                 Dimensions (Volume)

Tucker box 12-15 kg 40 x 30 x 30 cm (0.048 cubic metres)

Travel bag 10 kg 60 x 30 x 30 cm (0.054 cubic metres)

Travel bag 7-10 kg 60 x 30 x 30 cm (0.054 cubic metres)

The tucker box contains the food that you require for the journey.

Your travel bags consist of one containing essential work items such as operating manuals, torch and first aid kit, and another containing bedding, sheets, pillows and clothing. The weight of these bags totals approximately 17-20kg, 15-18kg of which relates to essential work items.

There is no facility at the work location where you can store any of these items so you must transport them yourself between your home and the work location.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

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.

A deduction is generally not allowable for the cost of transport by an employee between home and his normal workplace as it is generally considered to be a private expense.  The cost of travelling 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, a deduction may be allowable for the cost of travel between home and work for an employee who is required to transport bulky equipment. Paragraphs 63 and 64 of Taxation Ruling TR 95/34 explain that a deduction may be allowed in these circumstances where:

· the cost can be attributed to the transportation of bulky equipment rather than to private travel between home and work,

· it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice,

· there are no secure facilities available for storage of the equipment at the work place.

The question of what constitutes 'bulky' equipment must be considered according to the individual circumstances in each case.

In FC of T v. Vogt 75 ATC 4073, 5 ATR 274 (Vogt's Case), the taxpayer was a professional musician who used his vehicle to transport bulky musical instruments and associated equipment from his home to his places of employment. It was found in Vogt's Case that the taxpayer was entitled to a deduction for home to work travel expenses as he was using his vehicle for work related purposes to transport bulky equipment.

In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's Case), Senior Member J Block was of the opinion that the term 'bulky' should not be construed to refer only to an article of large size, such as the musical instrument subject to the decision in the Vogt's Case, but more aptly construed as similar to 'cumbersome' in the sense that it is not portable. In Crestani's Case, the tribunal was of the opinion a toolbox was 'bulky'; it was not easy to lift and could not be carried for any distance. The toolbox measured 57 cm x 28 cm x 25 cm (that is, having a volume of about 0.04 cubic metres) and weighed 27 kg. The toolbox 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 tucker box, and the work related contents of your two travel bags can be taken into account when considering if you are transporting bulky equipment. Although these three items are all lighter than the toolbox, they are either similar or greater in volume than the toolbox that was the subject of Crestani's Case. It must also be considered that the toolbox was the only item involved in Crestani's Case. When considered as a whole, the weight and volume of your tucker box, backpack, and the work related contents of your travel bag (a combined weight of between 27-31 kg and a volume of approximately 0.15 cubic metres) compares favourably in terms of being 'bulky' and 'cumbersome' when tested against Crestani's Case. As in Crestani's Case, your employer also did not provide a secure storage area for these items and the use of public transport would not be a viable option. 

In view of the facts provided, you are entitled to a deduction for expenses incurred in travelling to and from work when you are carrying the bulky equipment under section 8-1 of the ITAA 1997.