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Edited version of your written advice
Authorisation Number: 1012876002161
Date of advice: 11 September 2015
Ruling
Subject: Parking expenses
Question
Are you entitled to a deduction for your car parking expenses?
Answer
No.
This ruling applies for the following periods:
Year ended 30 June 2015
Year ended 30 June 2016
Year ended 30 June 2017
Year ended 30 June 2018
The scheme commences on:
1 July 2014
Relevant facts and circumstances
You work at an airport.
Your incur expenses for parking near your workplace.
Your car is used purely for travel to and from work and no bulky tools or equipment is involved.
Your shifts are for less than four hours.
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) states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. However, you cannot deduct a loss or outgoing to the extent that it is capital, private or domestic in nature.
Certain expenditure is incurred in order to be in a position to be able to derive assessable income, for example, unless one 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).
As expenses for travel to and from work are ordinarily incurred to put a taxpayer in a position to earn assessable income rather than in the course of carrying out employment duties, they are not deductible. Also, they are private expenses; such expenses are incurred as a necessary consequence of living in one place and working in another. There are a limited number of circumstances in which travel between home and work is considered to be travel in the course of carrying out income earning activities and therefore may be deductible. These circumstances include where the employee's work is itinerant (for example, a travelling salesperson) or bulky tools are required to be transported.
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 described in TR 95/19 in that you are travelling from your home to your place of work. You are not incurring the parking expenses travelling between places of employment, when undertaking a course of study, or in the course of carrying out your employment duties. The parking expenses occur when you are travelling to your workplace to start work.
Therefore the cost of your parking fees are considered to be private and domestic in nature and as such are not deductible under section 8-1 of the ITAA 1997.
Further information
Even where a taxpayer's travel between home and work is deductible under section 8-1 of the ITAA 1997 (for example, where their work is itinerant or they are required to transport bulky equipment) so that their parking also meets the requirements to be deductible under section 8-1 of the ITAA 1997, their parking expenses may be excluded from being deductible by section 51AGA of the Income Tax Assessment Act 1936 (ITAA 1936).
Section 51AGA of the ITAA 1936 states that a deduction is not allowable for car parking expenses where an employee travels between home and their primary place of employment and they are parked for four or more daylight hours at their primary place of employment.
In situations where you are parked for less than four hours, you are only entitled to a deduction for parking expenses when you are undertaking work-related travel (that is, when travelling as part of carrying out your work duties rather than simply travelling to start work).
That is, if your situation does not fall within section 51AGA of the ITAA 1936, this does not automatically mean that your car parking expenses are deductible; rather your expenses must still meet the requirements of section 8-1 of the ITAA 1997.
In your case your situation does not fall within section 51AGA of the ITAA 1936 so that section does not specifically exclude your expenses from being deductible. However, your car parking expenses do not meet the requirements of section 8-1 of the ITAA 1997 as you are simply travelling to your workplace in order to start work. Therefore, your car parking expenses are not deductible.