Edited version of your written advice

Authorisation Number: 1012862240800

Date of advice: 19 August 2015

Ruling

Subject: Travel expense

Question

Are you entitled to a deduction for expenses incurred for travel between your home and your work place?

Answer

No

This ruling applies for the following period

Year ended 30 June 2015

The scheme commenced on

1 July 2014

Relevant facts

You are employed at a facility as a technician in a particular field. This facility is not open to the general public and access to buildings at the site is controlled by electronic swipe cards that are issued to all people on site.

When you commenced employment you brought with you the hand tools and meters that you owned.

You also use a ladder that is provided by your employer.

You are of the understanding that if you had not supplied your own tools your employer would supply the necessary equipment for you to do your job.

You work in various areas of the facility and are based in a workshop, shed and office area that is also used by other technicians. This area is secured from unauthorised access. You do not have an individual secured area where you could place your personal items.

You do not leave your tools and equipment at work, because you cannot secure them from the technicians who have access to the workshop and office area where you are based. You are worried that the safety characteristics of these items may be compromised and jeopardise your personal safety when using them.

You do not leave your employer's ladder and your tools and equipment at work, you take them home each day, in your own vehicle which you drive to and from work.

You carry the tools and equipment in a soft sided tool bag designed to be carried by hand or with a shoulder strap. The bag measures XXcm long x XXcm wide x XXcm high and weighs XXkg when all items are included.

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.

Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example, unless a person arrives at work it is not possible to derive income. This does not mean that the expenditure is incurred in the course of gaining or producing assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities (Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404; (1958) 7 AITR 166 (Lunney's Case)).

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, rather than in performance of those duties (see 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 where you are unable to leave the equipment at work and the transportation of the bulky equipment is not a matter of personal choice.

In your situation, you carry some work equipment while travelling between home and work.

In considering whether taxpayers were unable to leave equipment at work, the Administrative Appeals Tribunal (AAT) has stated that it is not necessary for the area at work where the equipment could be left to be 'impregnable' (Re 'Taxpayer' Applicant and Commissioner of Taxation [2001] AATA 694; Stuart James Millgate v. Commissioner of Taxation [2000] AATA 1040).

In your case, you are based in a workshop, shed and office area that are also used by other technicians. However, these areas are secured from unauthorised access by electronic swipe cards so that if your equipment did go missing or was tampered with, there would be a record of who had access to the area at the relevant time.

It is noted that as well as your own equipment you also transport between home and work a ladder supplied by your employer. Given that the ladder would be replaced by your employer if it was stolen and does not appear to be an item that could be tampered with to jeopardise your safety without it being apparent, it is considered clear that you transport the ladder as a matter of personal choice rather than a necessity.

It is also noted that it was your understanding that if you had not supplied your own tools your employer would supply the necessary equipment for you to do your job. Therefore, if having your tools stolen was a significant concern for you, you could have requested that your employer supply the tools necessary for your employment.

Having regard to all of the above, it is considered that you transport equipment between home and work as a matter of personal choice rather than necessity and therefore the expenses for this travel are not deductible.

Even if the transport of your personal tools was not a matter of personal choice, it is not accepted that they are bulky. The ladder is not included in determining whether the equipment you transport is bulky as the ladder is supplied by your employer and it is clear that it is transported as a matter of personal choice.

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

This question has been considered by the Courts and the AAT.

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 Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's Case), the taxpayer transported a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms. The taxpayer required the use of a trolley to move the toolbox from their vehicle to their work place. The AAT held that the toolbox was bulky due to how difficult it was to transport.

Although the weight and dimensions of your soft sided tool bag is similar to the toolbox in Crestani's Case, it is designed to be carried by hand or with a shoulder strap. As it is designed to be transported we do not consider its transportation is so difficult that it is bulky for the purposes of claiming travel between home and work. That is, your equipment is not considered to be of such bulk that it would change the primary purpose of your journey from one of transporting yourself to and from work to one of transporting the equipment.

Summary

It is considered that you transport equipment between home and work as a matter of personal choice rather than necessity and therefore the expenses for this travel are not deductible. Even if the transport of your tool bag was not a matter of personal choice, it is not considered to be bulky.

Your travel expenses are of a private nature and are incurred as a necessary consequence of living in one place and working in another (Lunney's Case). They are incurred in order to put you in a position to earn assessable income rather than in the course of earning the income.

Therefore, you are not entitled to a deduction for travel between home and work.