Edited version of your private ruling

Authorisation Number: 1012499461266

Ruling

Subject: Travel expenses

Question

Are you entitled to claim a deduction for your motor vehicle expenses, including tolls, between your home and work, when you are required to stay away overnight?

Answer

No

This ruling applies for the following period

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

Year ended 30 June 2013

The scheme commenced on

1 July 2009

Relevant facts

You travel between your home and the staff carpark to perform your duties.

Your roster comprises of single day duties, plus overnight duties where you are away for periods generally of 1 night, but occasionally up to x nights.

You carry a bag containing work equipment which weighs xx kg.

You also carry an overnight bag when you are required to stay away overnight, which contains, company issued uniform, including jacket and raincoat, and other personal items.

This bag weighs between xx and xx kg, depending on weather conditions and days away.

There are no lockable storage facilities for items you require at your workplace.

When you are away for greater than 48 hours your employer pays you an allowance of xx cents per kilometre for the distance travelled to and from your work.

You also incur tolls when undertaking these journeys to and from your work.

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.

In Lunney v. FC of T (1958) 100 CLR 478 the Full High Court laid down the principle that for a deduction to be allowable it is not enough for the expenditure to be an essential prerequisite to the derivation of assessable income. In that case it was held that the costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income.

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

However, there are situations where it has been accepted that travel by employees from home to work is deductible. One of these situations is if the employee has to transport by vehicle bulky equipment necessary for employment.

The question of what constitutes bulky equipment was considered in Crestani v. Federal Commissioner of Taxation 98 ATC 2219; (1998) 40 ATR 1037. In that case, the toolbox in question measured 56cm x 25cm x 28cm and weighed approximately 27kg. 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 and that public transport was not a viable option.

In Case 43/94 94 ATC 387; AAT Case 9654 (1994) 29 ATR 1031 a flight sergeant with the Royal Australian Air Force was denied a deduction for the cost of transporting his flying suit and other items used for work purposes. The items were carried in:

· a duffle bag measuring 75cm long x 55cm wide x 50cm deep and weighing 20 kilograms when packed

· a suit bag which weighed 10 kilograms when packed, and

· a briefcase sized navigational bag which contained charts, work manuals and study materials.

It was held that the travel was private in nature and the items were not sufficiently bulky to impede easy transport. It was held that the mode of transporting the duffle bag, the navigational bag and the suit bag was simply a consequence of the means adopted in conveying himself to and from his place of employment.

In your case, you are required to carry a bag containing work equipment which weighs xx kg and another bag containing your clothing and other personal items and weighs xx to xx kg. There are no secure facilities available at work.

You carry both work equipment and personal items between your home and your workplace; similar to Case 43/94. We consider the work equipment when separated from your personal effects is not considered to be of a size or weight that would make their transportation difficult.

Thus, the equipment carried is not considered to be of such bulk that it would change the primary purpose of your travel from one of transporting yourself to and from work to one of transporting the equipment. Also, the lack of secure storage at your work is not sufficient consideration, as a deduction is only allowable when it is established the tools or equipment are bulky.

Therefore your travel expenses including tolls are considered to be private in nature and as such are not deductible under section 8-1 of the ITAA 1997.