Private ruling: Travel- bulky equipment
Date of advice: 24 July 2018
Published: September 2018
Ruling period: Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ended 30 June 2021.
Date scheme commenced: 1 July 2017

Ruling: Q1: Is car travel between home and work in your home city deductible when carrying protective clothing? | A1: No. | Q2: Is car travel between home in your home city and accommodation in another town deductible? | A2: No. | Q3: Is car travel between a work location in your home city and accommodation in another town deductible? | A3: No. | Q4: When in another town, is car travel between accommodation and a work location in that town deductible? | A4: No. | Q5: Is car travel between home in your home city and accommodation in another town deductible when carrying protective clothing? | A5: No. | Q6: Is car travel between a work location in your home city and accommodation in another town deductible when carrying protective clothing? | A6: No. | Q7: When in another town, is car travel between accommodation and a work location in that town deductible when carrying protective clothing? | A7: No.

Relevant facts and circumstances: You perform work at a number of locations in your home city and also in another city two hours travel away at the one location, on a regular basis. This is approximately 10 days per month, on average. You travel in your own car and keep a logbook. On most occasions this is booked in advance but frequently there are emergency and last minute activities where you don’t know in advance. You often need the protective clothing in order to work. The sites where you work provide protective clothing for your use. This is often ill-fitting and uncomfortable, and this is distracting when you are working. You purchased your own protective clothing, which must be kept flat and not folded. You keep the protective clothing in your car when travelling between home, work, and accommodation and work in the distant city. You almost always need to use the protective clothing when working in the distant city. There is no suitable and secure storage available at any of the locations to store the protective clothing. The protective clothing weighs over 6kg. You also carry a laptop and paperwork in the car for your work activities. Emergency jobs are often booked at the last moment, and it is precisely these jobs that will be likely to require the protective clothing. There is often no pre-warning of emergency jobs such as these and you only find out about these when arriving at work.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1

Reasons for decision: Summary: You are not entitled to a deduction for travel expenses when travelling to and from your workplace as the expenses are considered private and domestic in nature. | Detailed Reasoning - Detailed reasoning: 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 x 28 cm x 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 x 55 cm wide x 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 the protective clothing weighing over 6kg, a laptop and paperwork. While acknowledging that the protective clothing weighs over 6kg, we consider this equipment is not 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. Also, the lack of secure storage at your work is not sufficient consideration, as a deduction is only allowable when it is established the tools or equipment are bulky. Therefore, the car expenses you incur in travelling in the above situations are private in nature. Accordingly, the expenses are not deductible under section 8-1 of the ITAA 1997. | Detailed Reasoning - Travel to a distant city as an alternate workplace: Although the issue of expenses incurred in relation to accommodation near the workplace while maintaining a family residence in another location was considered in the cases of Federal Commissioner of Taxation v. Toms 89 ATC 4373: (1989) 20 ATR 466 (Toms’ Case ) and Federal Commissioner of Taxation v. Charlton 84 ATC 4415; (1984) 15 ATR 711 ( Charlton’s Case )., the circumstances of your car travel to Bendigo in order to place yourself in a position to work are similar. The essentially private character of travel between home and work is not affected by factors such as the mode of transport, the availability of transport, the lack of suitable public transport, the erratic times of employment, the time of travel, the distance of travel and the necessity of travel (Taxation Ruling IT 2543). A deduction is generally allowable for the cost of travelling to and from an alternative workplace. For example, travel to and from a different centre for a workplace meeting or training is an allowable deduction. As highlighted in paragraph 34 of Miscellaneous Taxation Ruling MT 2027, an alternative destination is not a regular place of employment. In your case, you work at the distant city for three days each month. This then is a regular place of employment and therefore cannot be regarded as an alternative place of work. You incurred expenses for travel due to having your home in one town and your temporary place of employment in another. While the expenses would not have been incurred were it not for the distance of your work place from your family home, they are a prerequisite to the earning of assessable income. That is, they are incurred in order to put you in a position to be able to earn income but are not incurred in the actual course of gaining or producing that income. Also, the expenses are considered to be private in nature as they are incurred due to your choice of where you live and where you work. | Detailed Reasoning - Itinerancy: Taxation Ruling TR 95/34 provides guidelines for establishing whether an employee is carrying out itinerant work. These guidelines have been established through the views taken by the Courts, Boards of Review and Administrative Appeals Tribunal in deciding when an employees work is itinerant. The following characteristics have emerged from these cases as being indicators of itinerancy: ● Travel is a fundamental part of the employees work. ● The existence of a web of work places in the employees regular employment, that is, the employee has no fixed place of work. ● The employee continually travels from one work site to another. An employee must regularly work at more than one work site before returning to his or her usual place of residence. ● The employee has a degree of uncertainty of location in his or her employment (that is, no long-term plan and no regular pattern exists). The characteristics above provide guidelines for determining whether an employee's work is itinerant. It is considered that no single factor on its own is necessarily decisive. In your situation, while it is acknowledged that on average you travel from one workplace to another 10 times in a month and there is a degree of uncertainty in these occurrences, this is not sufficient to support your employment as being considered itinerant. Consequently, you are not entitled to claim a deduction for your travel expenses to and from work as these expenses are considered private in nature. 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.