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Edited version of your private ruling
Authorisation Number: 1012501778485
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 a fly in fly out worker and you drive your car to the airport and park it at the airport parking.
You then fly to your worksite for several weeks and then return home and pick up your car.
You incur parking fees.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 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 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.
TR 95/19 at paragraph 102 states that a deduction is allowable for parking fees and tolls if the expenses are incurred while travelling:
· between two separate places of work;
· to a place of education for self education purposes; or
· in the normal course of duty and the travelling expenses are allowable deductions.
In your case the parking fees occur in circumstances similar to those described for airline employees in TR 95/19. Although your car is not parked near your main workplace, the expenses are incurred when you are still in the process of travelling from your home to your place of work. Furthermore although the journey is broken up (part travel is by your private vehicle, part by plane) you are still in the process of travelling from your home to your workplace. You are not incurring the parking expenses travelling between places of employment, when undertaking a course of study, or in the course of your employment. The parking costs occur when you are travelling to your workplace to start work.
These expenses are not deductible as they are not incurred in gaining or producing assessable income, but as a prerequisite to gaining income.
The cost of your parking fees are considered to be private in nature and are not deductible under section 8-1 of the ITAA 1997.