Edited version of private advice

Authorisation Number: 1051607607533

Date of advice: 15 November 2019

Ruling

Subject: Work Related Expenses-home to work travel with bulky tools

Question

Are you entitled to a deduction for travel expenses that you incur in carrying equipment between your home and your workplace?

Answer

No

This ruling applies for the following periods:

Year ended 30 June 2020

Year ended 30 June 2021

Year ended 30 June 2022

Year ended 30 June 2023

The scheme commences on:

1 July 2019

Relevant facts and circumstances

You are employed as a truck driver for XXXX.

You are required by your employer to transport a specified list of items to and from the truck each shift.

This specified list includes the following;

·        1 approved intrinsically safe torch

·        Fresh spare batteries

·        PVC safety gloves

·        Approved protective eye wear

·        National heavy vehicle log book

·        Danger goods emergency manual

·        Drivers handbook

·        Complete replacement PPE uniform in the event of fuel spills

·        Approved safety helmet

Items supplied by the company that each driver must carry

·        Long sleeve woollen antistatic Jumper

·        Heavy antistatic jacket

·        Antistatic rain jacket and pants

Other items carried in normal work activities;

·        Esky for meals and cold water

·        Small pouch of tools for emergency repairs

·        Sun hat

·        Sunglasses

The items are unable to be left in the truck due to shared use of other employees.

The truck is left at differing locations for changeover of drivers and there is nowhere at the truck depots to store these items.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 8-5

Income Tax Assessment Act 1997 section 12-5

Income Tax Assessment Act 1997 division 28

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 losses or outgoings are of a capital, private or domestic nature.

Section 8-5 of the ITAA 1997 deals with specific deductions, and allows deductions where an amount can be deducted under a specific provision of the ITAA 1997, other than within Division 8.

Section 12-5 of the ITAA 1997 lists those provisions dealing with specific deductions. Included in this list is Division 28 of the ITAA 1997 which deals with car expenses. Division 28 sets out the rules for working out deductions for car expenses if you own or lease a car.

Therefore, in considering whether you are entitled to a deduction for car expenses it is necessary to consider whether the expenses were incurred in travelling in the course of producing your assessable income.

Travel to and from work are essentially private and domestic in nature.

However, the Commissioner accepts that expenses incurred by employees in travelling to and from work are deductible in certain circumstances. One of the exceptions to the general view is where the employee is required to transport bulky equipment necessary for employment. Paragraphs 63 and 64 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses state that:

If the equipment is transported to and from work by the employee 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 (see Case 59/94 94 ATC 501; AAT Case 9808 (1994) 29 ATR 1232).

This view is supported by Deputy President Frost in Ford v Commissioner of Taxation [2014] AATA 361.

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

In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's Case), a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered to be bulky, in the sense of cumbersome, and was not easily portable. The travel cost incurred was attributable to the transportation of the bulky equipment rather than the private travel of the taxpayer between his home and workplace because the employer did not provide a secure storage area for the toolbox and the use of public transport was not a viable option.

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. 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.

Despite the fact that you are required to take the listed specified items to work each day and there is no storage for these items to be held overnight, a deduction for the expenses incurred for your home to work travel are not deductible under section 8-1 of the ITAA 1997 as the items listed do not constitute what is considered "bulky" and does not impede easy transport. We accept that your employer did require you to transport some personal protection equipment and other items to and from work, but that they are not bulky in nature. Additionally, the esky with meals and water that you take to work is considered private in nature. It is also noted that it is not a requirement by your employer to carry a tool kit, sun hat and sunglasses but rather a personal choice.