Edited version of your private ruling

Authorisation Number: 1012473551072

Ruling

Subject: Parking expenses

Question

Are you entitled to claim a deduction for your car parking expenses?

Answer

No

This ruling applies for the following period

Year ending 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts

You are employed in a particular profession.

Your roster dictates that when you sign on for work, it is in different locations around the world.

You incur parking expenses when travelling to your Australian departure port.

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) states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. However, you cannot deduct a loss or outgoing to the extent that it is capital, private or domestic in nature.

Generally the expenses of travel to and from work are not deductible. The essential purpose of much home to work travel is not to enable a taxpayer to derive assessable income; that such expenses are incurred is a necessary consequence of living in one place and working in another (Lunney & Haley v FC of T (1958) 100 CLR 478). The mode of transport, the availability of transport, the lack of suitable public transport, erratic times of employment, time of travel, distance of travel, frequency of travel and necessity of travel all are factors which do not alter the essential character of travel between home and work as private in nature.

Taxation Ruling TR 95/19 discusses deductions for airline employees and states that a deduction is not allowable for parking fees and tolls incurred when airline employees are travelling between their home and their normal place of employment. The cost of travel is of a private expense, the parking fees and tolls have the same private character.

In Case L49 79 ATC 339, in the Administrative Appeals Tribunal, an airline pilot claimed deductions for travelling between his home and the airline's city terminal prior to departing and returning from overseas flights. That pilot also sought a deduction for travelling between his home and the airport for reasons associated with his employment, such as simulator or flight training.

Tribunal Member Dr G W Beck said (at p 351) that:

"It has long been generally accepted that, under the rule, a man's expenses of travelling to his work are not deductible; only his expenses of travelling on his work are deductible, for these alone are incurred in the performance of the duties of his employment."

At p 352, Dr Beck continues:

"His home is, however, still a home and the "choice" principle applies to the extent that on the days he travelled to Mascot for simulator training (four sessions per year), the days he was required to proceed to Avalon training field or to attend lectures on safety procedures, fire drill and so on, and on the days he drove to the city terminal of his airline to embark on a tour of flying duty he was, prima facie, travelling to commence work."

Dr Beck summarised, in allowing some of the claimed travel costs, that

"Excluded from deductibility would be the trips to carry out activities that have the character of "attending for work at Mascot", eg simulator training, fire drill, lectures and so on."

In your case you travel from your home to the airport where you incur parking expenses. You have argued that these parking expenses are incurred between separate places of employment in different locations. However you do not commence work in these locations until you have signed on.

The parking fee expenses that you incur when you travel from your home to the airport are in circumstances similar to the pilot in the case above. These expenses are not deductible as they are not incurred in gaining or producing assessable income, but as a prerequisite to gaining income.

Whilst we acknowledge you have different work locations around the world, you are not incurring these parking expenses travelling between these workplaces. These expenses are incurred when you are still in the process of travelling from your home to your place of work.

Therefore the cost of your parking fees are considered to be private in nature and as such are not deductible under section 8-1 of the ITAA 1997.