Edited version of private advice

Authorisation Number: 1051957836413

Date of advice: 10 March 2022

Ruling

Subject: Self-education motor vehicle expenses and work-related storage expenses

Question

Are you entitled to a deduction for self-education expenses you incurred in respect of some of your travel between your home and course location?

Answer

Yes.

Question

Are you entitled to a deduction for storage costs related to your work-related tools and equipment?

Answer

Yes.

This ruling applies for the following periods:

From 1 July 20XX to 30 June 20YY

The scheme commences on:

1 July 20XX

Relevant facts and circumstances

You are a qualified teacher employed to provide outdoor education at an Outdoor Education Centre (the Centre).

You are completing a Certificate IV in Outdoor Recreation (Cert IV).

Some weekends, you travel to the Centre or other locations to complete coursework for your Cert IV.

While attending on weekends for coursework you are not paid and you do not perform any employment duties.

After some weekends of coursework you will remain at the Centre throughout the following week to teach and complete on-the-job practical components for your Cert IV.

You pay rent for a storage room at the Centre to store your various items of bulky outdoor equipment, which you require for work.

The rent for your storage room is paid as a post-tax deduction from your fortnightly salary.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Work-related self-education expenses; motor vehicle

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent that they are incurred in gaining or producing assessable income unless the outgoings are capital, private or domestic in nature or relate to earning exempt income.

Taxation Ruling TR 98/9 Income tax: deductibility of self-education expenses incurred by an employee or a person in business (TR 98/9) explains the various circumstances in which self-education expenses are allowable as a deduction. Relevantly, a deduction is allowable for self-education expenses if a taxpayers income earning activities, at the time they incur the expense, are based on the exercise of a skill or specific knowledge and the subject of the self-education enables the taxpayer to maintain or improve that skill or knowledge (Federal Commissioner of Taxation v. Finn (1961) 106 CLR 60; (1961) 12 ATD 348; (1961) AITR 406).

You have incurred expenses in relation to a Certificate IV in Outdoor Recreation. For these expenses to be deductible, they must have an appropriate connection with your income earning activities at the time the expenses were incurred and must not be capital, private or domestic in nature.

Your course is directly related to your employment as a teacher providing outdoor education at an Outdoor Education Centre (the Centre), as the course maintains and improves your skills and specific knowledge relevant to your employment. As such, you are entitled to claim eligible self-education expenses in respect of this course.

Generally, you can claim motor vehicle expenses for travel between your home and place of education and return, and between your place of work and place of education and return. However, if you travel from your home to your place of education and then to your place of work, only the costs of the first leg of each journey is allowable. The costs of the second leg are costs incurred in order to return home or to get to work. The essential character of these types of expenditure are of a private nature, per the decision of the High Court in Lunney v. FC of T (1958) 100 CLR 478 at 501; 11 ATD 404 at 414.

For the same reason, motor vehicle expenses between your home and your place of education where you carry out your income-earning activities at that place of education, will not be deductible, as explained at paragraph 160 of TR 98/9. However, we consider that this restriction does not apply where you attend your workplace exclusively for participation in coursework and you are not performing any income-producing activities.

As such, your travel between your home and course location is deductible as a self-education expense where your attendance on any given day is only for course participation purposes only. Examples relevant to your situation are provided below:

•         If you travel from your home to the Centre (or some other course location) and home again, to participate only in course work for your Cert IV and not for any teaching purposes- the cost of the travel to and from home will be deductible.

•         If you travel from your home to the Centre on a weekend to participate solely in coursework on the weekend but then remain at the Centre throughout the following week to teach and complete on-the-job assessments before returning home- only your travel to the Centre will be deductible.

•         If you travel from your home to a course location that is not the Centre, then travel to the Centre to perform your work duties, then travel home- you will be able to claim the cost of the travel to your course location and to the centre, but not the travel home.

Work-related expenses; storage

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent that they are incurred in gaining or producing assessable income unless the outgoings are capital, private or domestic in nature or relate to earning exempt income.

Paragraphs 205 to 207 of Taxation Ruling TR 95/14 Income tax: employee teachers - allowances, reimbursements and work-related deductions explain that deductions are generally allowable for expenses incurred in relation to teaching aids to the extent that those teaching aids have a direct and relevant use in carrying out teaching duties.

It follows that the cost of storing the teaching aids will be an allowable deduction to the extent that they are used for teaching and are not private, domestic or capital in nature.

You are a teacher who provides instruction in various outdoor activities at an outdoor education centre. You are entitled to claim a deduction for the rental expenses incurred to store your bulky outdoor equipment, to the extent that they are used as teaching aids.