Edited version of your written advice

Authorisation Number: 1013122402814

Date of advice: 10 November 2016

Ruling

Subject: Bulky tools

Question 1

Is the motor vehicle expenses incurred as a FIFO worker deductible if you are required to transport bulky tools from home to airport enroute to your worksite?

Answer

Yes.

Question 2

Is the parking fees incurred for as a FIFO worker deductible if you are required to transport bulky tools from home to airport enroute to your worksite?

Answer

Yes.

This ruling applies for the following period:

Year ending 30 June 20YY

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are a Fly-in-Fly-out (FIFO) worker.

You work as a tradesman for your employer.

You reside in XXXkms from State A Airport.

You travel to State A to catch flights to various mine sites where your work is undertaken.

You fly directly from State A airport to the mine site. The nature of your role requires you to visit various sites. This is usually a different site each swing rendering it unfeasible to store the tools in one location.

On returning to State A you then travel from the airport to your residence.

As of July 20XX you have been required to bring your own tools to the mine site when you travel there for work.

Your employer has supplied a formal letter with a list of tools that they require you to bring to the mine site to complete your duties. The list is as follows:

● Welding helmet

● Welding gloves

● Welding hood

● Hammer

● BM tape

● Centre punch, large

● Set of combination metric spanners

● Combination spanner

● Gympie, non-wooden handle

● Centre punch

● Square

● Stringline

● Vice grip

All of the tools listed above are carried in a toolbox separate to your personal clothing items.

It is likely that this arrangement will continue for the entire 20XX-YY financial year and possibly beyond.

You often don't know which site you will be attending until a couple of days, sometimes as little as 12 hours, before you are to be at that site.

The tools weigh between 20-40kgs.

Also you consider it to be impractical to catch a bus that runs irregularly as it would involve staying in accommodation in State A at your own expense.

You consider that your only option is to drive yourself and your tools to the airport.

You leave your car parked at the State A airport while you are away at the mine sites.

Relevant legislative provisions

Income Tax Assessment Act - 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.

A deduction is generally not allowable for the cost of transport by an employee between home and his normal workplace as it is generally considered to be a private expense.  The cost of travelling between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in performance of those duties.

As stated in Taxation Ruling TR 95/19, a deduction may be allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work.

If the equipment is transported to and from work as a matter of convenience or personal choice, it is considered that the transport costs are private and no deduction is allowable.

A deduction is not allowable if a secure area for the storage of equipment is provided at the work place (Case 59/94 94 ATC 501; AAT Case 9808 (1994) 29 ATR 1232)).

Furthermore, the equipment must be bulky and used in the earning of assessable income.

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

In FC of T v. Vogt 75 ATC 4073, 5 ATR 274 (Vogt's Case), the taxpayer was a professional musician who used his vehicle to transport bulky musical instruments and associated equipment from his home to his places of employment. It was found in Vogt's Case that the taxpayer was entitled to a deduction for home to work travel expenses as he was using his vehicle for work related purposes to transport bulky equipment.

In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's Case), Senior Member J Block was of the opinion that the term 'bulky' should not be construed to refer only to an article of large size, such as the musical instrument subject to the decision in the Vogt's Case, but more aptly construed as similar to 'cumbersome' in the sense that it is not portable. In Crestani's Case, the tribunal was of the opinion a toolbox was 'bulky'; it was not easy to lift and could not be carried for any distance. The toolbox measured 57 cm x 28 cm x 25 cm (that is, having a volume of about 0.04 cubic metres) and weighed 27 kg. The toolbox was considered as 'bulky', in the sense of 'cumbersome', and the transport cost was 'attributable' to the transportation of such bulky equipment rather than private travel between home and work. The employer did not provide a secure storage area for the toolbox and the use of public transport was not a viable option.

In your case, based on the information provided, it is accepted that the equipment you use in the performance of your duties is bulky and not easily portable. Further, you work at different sites each shift. There is also very little notice given to you as to which site you will be working at for your next shift. This makes storing your equipment at your workplace difficult as it changes from shift to shift, making it a requirement to transport your bulky tools from your home to the airport.

Accordingly, a deduction will be allowable for the motor vehicle costs attributed to the transportation of the bulky equipment between your home and work.

Parking fees

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, as discussed above, your travel expenses are allowable deductions as you are transporting bulky tools necessary for you to carry out your employment. Therefore the cost of your parking fees are considered to be incurred in gaining your assessable income and as such are deductible under section 8-1 of the ITAA 1997.