Edited version of your written advice

Authorisation Number: 1013086147612

Date of advice: 7 September 2016

Ruling

Subject: Work related expenses - bulky tools

Question

Are you entitled a deduction for travel between your home and work?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2016.

The scheme commenced on

1 July 2015

Relevant facts and circumstances

You are employed as an emergency response team (ERT) member and vehicle operator at a remote site.

As a member of the ERT you are paid more than the rate for a vehicle operator.

You travel from your place of residence by car to a capital city airport where you pay for parking, and travel by plane to a regional airport. A shuttle bus is provided by your employer at a pickup place distant from the regional airport.

You need to catch a taxi to get the shuttle bus.

The trip to the mine site is over 100 kilometres drive from the airport. You travel with three bags to work, one bag contains the personal items you need and this bag is carry-on luggage on the plane. The other two bags are check in luggage and weigh more than 25kg combined. The bags contain the protective clothing and equipment needed for work as per your contract and they also contain the safety equipment needed for your role as an ERT member. The dimensions of the bags are 75cm x 45cm x 35cm. The contract with your employer requires that you carry steel cap lace up boots, safety glasses, protective clothing - long pants, high visibility shirt with reflective strips and a hard hat. It is also required that for safety reasons padlocks are required to be carried.

Your employer provides accommodation whilst working on shift. A locker is provided in the rooms available during the shifts. As you are only on shift for a couple of days at a time it is not safe to leave items of value as the lockers have been broken into. The lockers provided are not large enough to hold the equipment that you are carrying. You have additional training to be an ERT Member. The training consists of advanced first aid, road crash rescue, vertical ropes and fireman breathing apparatus. To maintain the qualification your skills are tested every 12 months and you have to complete training as required. The training can be completed when you are at home and this is another reason why you need to carry the safety equipment to and from work. As you are flying to work there are additional costs associated with carrying the equipment as your bags are too large to carry on. You incur fees as you need to purchase tickets that have check-in luggage.

As an ERT Member it is a requirement to be able to respond to emergency situations whilst working on shift. When travelling on the bus to the work site there can be situations that arise that require emergency response and emergency equipment as you may be the only person on the bus that is able to provide such assistance. Also, ERT Members are required by your employer to attend to civil emergencies such as accidents on the highway.

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 or a provision of the taxation legislation excludes it.

Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or it is not an expense incurred in gaining or producing assessable income.

There are situations where it has been accepted that travel by employees from home to work is deductible as the employee is transporting bulky equipment.

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 25 cm * 28 cm * 57 cm and weighing 27 kilograms 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.

The contents of the toolbox were tools only.

In the case of bulky equipment, the cost is attributed to the transportation of the bulky equipment rather than private travel between home and work where the transportation of the equipment is essential and is not done as a matter of personal choice or convenience and there is no secure storage provide at the workplace.

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 75 cm long * 55 cm wide * 50 cm 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, you carry two bags containing your heavy duty protective work clothes and work gear, boots, helmet, gloves, jacket, belt, crib bag and change of clothes, in addition to the safety equipment you need as a member of the emergency response team. The work clothes and crib bag are considered to be personal in nature even though the clothes are heavy duty to provide additional protection to standard work clothing.

While the two bags which contain your safety equipment may appear bulky, the transport of your personal items which is also in these bags is incidental to the primary purpose of transporting yourself to work. Similar to Case 43/94 we consider the safety equipment, when separated from your personal effects is not considered to be of a size or weight that would make its transportation or storage 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.

While the need for you to respond to emergency situations is acknowledged, this does not alter the fact that the safety equipment, when separated from your personal effects is not considered to be of a size or weight that would make its transportation or storage difficult.

Therefore, the expenses you incur in travelling between home and your workplace are private in nature. Accordingly, the expenses are not deductible under section 8-1 of the ITAA 1997.