Edited version of your private ruling

Authorisation Number: 1012461020837

Ruling

Subject: Work related travel expenses

Question 1

Are you entitled to a deduction for the car expenses that you incur travelling between your home and workplace?

Answer

No.

Question 2

Are you entitled to a deduction for the car expenses that you incur travelling between your two places of employment?

Answer

Yes.

Question 3

Are you entitled to a deduction for car parking expenses incurred when parking at your place of employment for more than four daylight hours?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 2012

The scheme commences on:

1 July 2011

Relevant facts and circumstances

You are employed full time at location A.

After work, on some days of the week you are employed by another company to perform other work duties (your second job) at the same location. Further, after work on other days of the week you will travel to location B to perform the same work duties.

For a period of time when you began the second job, you were required to use your vehicle to transport, between your home and the work sites, your personal household equipment to use to perform your work duties. The equipment is was less than 50 cm x 50 cm and weighed less than 5 kg.

Your employer then purchased equipment for you to use at the two sites. You were required to transport the equipment between the two sites to perform your work duties. You were also required to transport numerous containers of chemicals between the two sites.

You incurred parking expenses each day you parked at location A, which was between the hours of 7 am and 7 pm. You used the parking facility for all of the day time operational hours. After day time operational hours you moved your car to free car parking spots that weren't available during the day. Location B has its own carpark, so you did not need to pay for car parking there.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 paragraph 8-1(2)(d)

Income Tax Assessment Act 1997 section 995-1

Income Tax Assessment Act 1936 section 51AGA

Fringe Benefits Tax Assessment Act 1986 section 136

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 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 of employment, rather than in the 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 between home and work is deductible. These situations include:

1. where the taxpayer's home constitutes a place of employment and travel is between two places of employment or business

2. where the employment can be construed as having commenced at the time of leaving home (for example a doctor on call), and

3. the transportation of bulky equipment in some circumstances.

The only situation that could apply to your case would be the transportation of bulky equipment.

Transporting bulky equipment

Taxation Ruling TR 95/34 states that a deduction for travel expenses may be allowed in certain 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 equipment at the work place.

The question of what constitutes 'bulky equipment' must be considered according to the individual circumstances in each case.  Equipment that is of a private nature cannot be taken into account when considering whether a taxpayer is transporting 'bulky equipment'.

In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037, a 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 toolbox in this case measured 10 inches wide, 10 inches high, and about 22 inches long (approximately 0.25 m x 0.2625 m x 0.5625 m), and weighed approximately 27 kilograms.

What constitutes bulky equipment was also considered in Case 43/94 ATC 387; AAT Case 9654 (1994) 29 ATR 1031, which involved a flight sergeant with the Royal Australian Air Force who was denied a deduction for the cost of transporting his flying suit and other items used for work purposes. In this case the Administrative Appeals Tribunal found that his equipment was not of sufficient size or weight to impede facile transport.

In your case, for a period of time you were required to transport your personal equipment from your home to your place of employment daily.

Although it was a requirement of your employment to transport personal equipment to your work location, it is not considered bulky or of a size and shape that could impede facile transportation of it to your workplace. Therefore, your travel from home to work is not considered to be undertaken to transport 'bulky equipment'.

As such you are not entitled to claim a deduction for the car expenses that you incur to travel between your home and workplace under section 8-1 of the ITAA 1997.

Travel between two places of employment

Section 25-100 of the ITAA 1997 provides for a specific deduction for transport expenses incurred on travel between two workplaces where certain conditions are met. These conditions include:

· the individual must have incurred transport expenses in travelling between two workplaces

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

· the individual does not reside at either place, and

· expenses incurred must not be capital, or of a capital nature.

In your case you incur travel expenses travelling between workplace A and workplace B. You do not reside at either workplace.

As such, the travel expenses incurred in travelling between your two places of employment are an allowable deduction.

Parking expenses

Paragraph 8-1(2)(d) of the ITAA 1997 provides that a deduction will not be allowable if another provision of the Act prevents the taxpayer from deducting it. Section 995-1 of the ITAA 1997 defines 'this Act' to include the Income Tax Assessment Act 1936 (ITAA 1936).

Section 51AGA of the ITAA 1936 specifically deals with the deductibility of car parking expenses and provides that a deduction will not be allowed to an employee for car parking expenses incurred on a particular day if:

· on that day, the employee has a primary place of employment; and

· on that day, the car is parked for one or more daylight periods exceeding 4 hours in total at, or in the vicinity of, that primary place of employment; and

· the expenditure is in respect of the provision of the car parking facilities; and

· on that day, the car was used for travel by the employee between their place of residence and their primary place of employment.

Section 51AGA of the ITAA 1936 will not apply if its operation is excluded under the regulations or the expenditure was incurred prior to 1 July 1993. Neither of these circumstances applies to you.

Under subsection 51AGA(2) of the ITAA 1936 the terms 'primary place of employment' and 'daylight hours' are to have the same meaning as in the Fringe Benefits Tax Assessment Act 1986 (FBTAA).

Section 136 of the FBTAA provides that 'primary place of employment' means the employer's business premises, or associated premises, on which an employee would normally carry out his/her employment duties. This section also provides that 'daylight hours' means those hours between 7.00 am and 7.00 pm.

In your case:

· you travelled between your place of residence and primary place of employment in your car

· you incurred parking expenses each day you parked your car at your primary place of employment, and

· your car was parked for more than four hours during the daylight hours of 7.00 am and 7.00 pm.

You meet all of the conditions required for the operation of section 51AGA of the ITAA 1936, and are therefore excluded from claiming a deduction for car parking expenses under section 8-1 of the ITAA 1997, by virtue of section 51AGA of the ITAA 1936.