Edited version of your private ruling

Authorisation Number: 1012498511343

Ruling

Subject: Travel expenses - bulky equipment

Question 1

Are you entitled to a deduction for the cost of transporting a suitcase to and from work?

Answer

No.

Question 2

Are you entitled to a deduction for the cost of purchasing a suitcase to be used to transport work clothing to and from work?

Answer

No.

This ruling applies for the following periods:

Year ending 30 June 2013

The scheme commences on:

1 July 2012

Relevant facts and circumstances

You are employed at a mine site.

You drive between your home and the mine site each roster.

You purchased a large suitcase which is more than 20kg when full.

The suitcase contains several pairs of work uniform, a work issued jacket and vest, steel cap boots, socks and underwear, some private clothing and toiletries.

As you are in a camp 'motelling' situation you are unable to leave your work clothing at your accommodation, and must bring everything home at the end of the three week shift.

You do not transport tools.

You do not use the vehicle for work purposes.

Your employer does not reimburse you or pay your travel expenses.

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.

Travel expenses

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 (paragraph 77 of Taxation Ruling TR 95/34).

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, and

· 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. However you do carry work clothing while travelling between home and work, therefore the issue of bulky equipment will be addressed further.

The question of what constitutes bulky equipment is a question of fact and must be considered according to the individual circumstances of each case.

The principle of bulky equipment was established in the case of FC of T v. Vogt 75 ATC 4073. In that case, the taxpayer was a musician who worked at a suburban R.S.L. club as a member of a well-known band. He kept his instruments (a trumpet, flugelhorn, acoustic bass guitar, electric bass guitar and amplifiers) at home because it was essential to practice on them, and it was the only practicable place to keep them. He used his car to transport the instruments between his place of residence and the various places where he worked and where he was engaged to play.

It was found that Vogt's income was earned not only by performing as a musician but also by providing valuable musical instruments. The expenditure was said to be attributed to the carriage of equipment rather than to his own travel.

Alternatively in Case L49 79 ATC 339; 23 CTBR (NS) Case 56 (Case L49), an airline pilot was not allowed a deduction for expenses incurred in transporting luggage to and from the airport. The taxpayer's duties commenced when he 'signed on' at the airport for a flight or, on other occasions of mandatory attendance, on arrival at the airport. In this case, Board Member Mr M B Hogan stated (ATC at 342; CTBR at 469):

The taxpayer had the normal accoutrements of a travelling businessman, a bulky suitcase and a hand satchel. But this bulk is hardly such as to suggest that the accoutrements were being transported primarily, and that the taxpayer obtained an incidental (and "tax free") ride. Nor, of course, are the businessman's personal accoutrements the equivalent of ``plant'' employed by [the taxpayer] in the production of his assessable income.

In regards to your suitcase, like the airline pilot in Case L49 it is considered you're simply carrying the normal personal accoutrements of a travelling businessman, and it is not plant used in the production of your assessable income. Therefore you are not considered to be transporting bulky equipment, and the cost of travel between home and work are private in nature and not deductible.

Luggage

The cost of purchasing luggage is considered private in nature, as it is not incurred in gaining or producing assessable. Therefore the cost of purchasing the luggage is not deductible.