Edited version of your written advice

Authorisation Number: 1012670648381

Ruling

Subject: Home to work travel

Question

Are you entitled to a deduction for home to work travel expenses?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts

You are an employee.

As part of your regular duties you are required to carry out repairs on vehicles and other equipment and the scope of these repairs usually involves minor tasks such as the replacement of light bulbs or the tightening of loose equipment.

You carry a tool box with you that measures approximately 50cm x 20 cm x 20cm and weighs between 25 and 30 kilograms. The tool box contains an assortment of tools such as screwdrivers and spanners.

Your employer does not supply you with any tools either at work or in each of the vehicles.

While you carry the toolbox as described above, the weight and quantity of tools that you are required to carry to perform the minor repairs necessary as part of your work duties is substantially less than what you actually carry. You have stated it is your personal choice to carry this quantity of tools.

You estimate the weight of the tools that you are required to carry is about five kilograms.

There is no secure storage for your tools at your workplace.

You carry this toolbox with you when you travel between your home and your workplace.

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, or relate to the earning of exempt income.

Expenses incurred in travelling to and from work are private or domestic expenses incurred as a prerequisite to income-earning activities. They are generally incurred to put an employee in a position to perform duties of employment, rather than in performance of those duties.  

A deduction may be allowable for home to work travel if the transport costs can be attributed to the transportation of heavy, bulky or cumbersome equipment, rather than to private travel between home and work.

Paragraphs 63 and 64 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses, explain that a deduction for travel between you home and place of work may be allowed in these circumstances where:

• the cost can be attributed to the transportation of bulky equipment rather than to private travel between home and work,

• it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice,

• there are no secure facilities available for storage of the equipment at the work place.

In your situation, your work has not commenced before leaving home and you are not considered itinerant. However you do carry tools 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.

Sciberras and Commissioner of Taxation [2011] AATA 509 (Sciberras' Case) addressed the issue of whether the equipment transported by the taxpayer was necessary for their employment. 

The case considered the matter of a fuel tanker driver who carried manuals, tools and gear in addition to personal protective equipment which he claimed were necessary for his work as a driver.

In Sciberras' Case Senior Member Letcher stated:

A common thread in the cases where an exception to the general rule is found to exist is that the equipment is an essential part of the work being specialist tools suited to the task or items intrinsically involved in the work. In the case, the tools, clothing and manuals were not essentials used in the driving work, nor were they items without which the work could not be done, nor were they required by the contract of employment or provision of law.

The relevant exception to the general principle may be stated as follows, and satisfied if:

(a)  It is an integral part of the income-earning activity;

(b)  It is essential to the performance of the work;

(c)  The expense is incurred as the only practical means of transporting it; and

(d)  There is no secure alternative to transporting it.

Each of the above criteria must be satisfied.

In your case, you carry both essential and non-essential work equipment items between your home and your workplace. We consider the essential work equipment, when separated from the non-essential work equipment, 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 or that the transportation of that equipment is necessary.

Therefore, after giving consideration to the principles noted above, you are not allowed a deduction for your car expenses for carrying your equipment from home to work.