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Ruling

Subject: Travel expenses

Question

Are you entitled to a deduction for the cost of your travel between home and work?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2009

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

The scheme commences on:

1 July 2008

Relevant facts and circumstances

Your workplace does not have equipment or areas for the material you need to fulfil you duties.

You work alone and must be self-sufficient. Therefore all necessary work material must be carried at all times whilst working.

You are on call for shift changes and overtime and that may be at any workplace so the equipment and bag is taken home ready for the next shift.

You carry a number of work and personal items in a bag that weighs less than 10 kilograms.

You do not commence work before leaving home.

You travel directly between home and work.

Your home is not a base of operations.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

You are not entitled to a deduction for the cost of your travel between home and work travel as your work does not commence before leaving home, you are not considered to be an itinerant worker and the equipment you carry is not considered to be of sufficient bulk. Therefore the travel expenses you incur are private in nature.

Detailed reasoning

Division 28 of the Income Tax Assessment Act 1997 (ITAA 1997) sets out the rules for working out deductions for car expenses if you own or lease a car.

There are four different methods of calculating car expenses deductions. To be eligible to claim a deduction for car expenses, Division 28 requires that there must be business kilometres (that is, kilometres the car travelled in the course of producing your assessable income).

Therefore, in considering whether you are entitled to a deduction for car expenses it is necessary to consider whether the expenses were incurred in travelling in the course of producing your assessable income.

Taxation Ruling TR 95/34 states at paragraph 77:

A deduction is generally not allowable for the cost of transport by an employee between home and his or her normal work place 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 the performance of those duties. This principle is not altered by the performance of incidental tasks en route (paragraph 34 of Miscellaneous Taxation Ruling MT 2027) or use of a car because using public transport is impracticable.

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,

· 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.

Paragraphs 63 and 64 of Taxation Ruling TR 95/34 explain that a deduction may be allowed in 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, and

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

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. 

The question of what constitutes bulky equipment was considered in Crestani v. Federal Commissioner of Taxation 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's case). In that case, the toolbox in question measured 56cm x 25cm x 28cm and weighed approximately 27 kilograms. The Administrative Appeals Tribunal (AAT) in that case decided that the toolbox was sufficiently cumbersome to be considered bulky. The opinion of the AAT was the toolbox was not easy to lift and could not be carried for any distance.

In Case 43/94 94 ATC 387; AAT Case 9654 (1994) 29 ATR 1031, the taxpayer, a flight sergeant with the Royal Australian Air force, was denied a deduction for the cost of transporting items required to and from work in a duffle bag, a briefcase sized navigational bag and on occasions a suit bag. The duffle bag when packed weighed 20 kilograms and measured 75cm long, 55 cm wide and 50 cm deep. The suit bag weighed 10 kilograms. It was considered that the duffle bag was not of sufficient size or weight to impede facile transport. 

In your case, you are required to carry work and personal items in a bag which weighs less than 10 kilograms.

It is considered that the items you carry are not sufficiently cumbersome or heavy to be considered bulky. Based on the decisions in Crestani's case and Case 43/94 your bag is not considered to be of a size or weight that would make its transportation difficult. It is also noted that several of the items you carry in the bag are private in nature.

Your work items are not considered to be of such bulk that they would change the primary purpose of your journey from one of transporting yourself to and from work to one of transporting the work items. Consequently you are not entitled to a deduction.