Edited version of your private ruling

Authorisation Number: 1012502956703

Ruling

Subject: Travel expenses

Question

Are you entitled to a deduction for the expenses you incur in travelling between home and work?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2013

The scheme commences on:

1 July 2012

Relevant facts and circumstances

You are an employee.

You were issued a set of equipment that you are solely responsible for and you are required to carry the equipment to work whenever you are rostered as you may be called from rostered duty to act in a role that requires the equipment as situations arise.

You do not leave the issued equipment at work as you are personally responsible for them and you are required to be kitted up on arrival (if called in off duty) but still need access to the equipment if rostered on.

You are also required to attend other sites as support when situations require and you need to have the issued equipment with you.

You are also required to have the issued equipment with you for offsite training days.

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.

Generally, travel between a taxpayer's home and place of work is considered to be private and domestic in nature and the cost of such travel is not deductible under the provisions of section 8-1 of the ITAA 1997. This is an established principle of law (Lunney v. Commissioner of Taxation [1958] ALR 225;1958 - 0311H - HCA;100 CLR 478;(1958) 11 ATD 404;(1958) 32 ALJR 139).

One of the exceptions to this general principle is when an employee is required to transport bulky equipment necessary for their employment. In such cases, a deduction for the cost of transporting that bulky equipment may be available provided some other requirements are met.

The basic requirements for a deduction to be allowed for the cost of transporting bulky equipment between a taxpayer's home and their place of work are detailed in paragraphs 63 and 64 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses. Essentially the basic requirements detailed in the paragraphs referred to are:

· the equipment being transported is bulky,

· the equipment is not being transported as a matter of convenience or personal choice, and

· there is no secure storage for the equipment at the workplace.

The question of what constitutes bulky equipment must be considered according to the individual circumstances in each case.

The Administrative Appeals Tribunal in Crestani v. FC of T 98 ATC 2219; 40 ATR 1037 (Crestani's Case) found the taxpayer's toolbox measuring 25cm x 28cm x 57cm and weighing 27kg was bulky and cumbersome. In this case, the taxpayer was an aircraft engineer who worked at Sydney Airport. They transported their toolbox home at the end of each shift as there was no secure storage at work. The Tribunal held that the home to work travel was attributed to the transportation of these tools. The expenses incurred in transporting these tools were deductible and the taxpayer was simply one of those fortunate few who is able to hitch a free ride on his tool box.

In Case 43/94 94 ATC 387 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.  These 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 mode of transporting the items was simply a consequence of the means adopted by the taxpayer to convey him to work. It was considered that the duffle bag was not of sufficient size or weight to impede facile transport.

In your case, the equipment that you carry is contained in a bag. Your situation is comparable to the facts in Case 43/94. Therefore, your equipment is not considered to be of sufficient size and weight to be characterised as bulky equipment. That is, it is not considered that the transportation of your equipment transforms your travel from being private to work related in nature

Therefore, you are entitled to a deduction for transporting your equipment under section 8-1 of the ITAA 1997.