Private ruling: Home to work travel
Published: September 2014
Ruling period: Year ended 30 June 2013 | Year ended 30 June 2014
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for travel between home and work? | A1: Yes.


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

Reasons for decision: Summary: 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 the course of gaining or producing assessable income, but are not allowable to the extent that they are of a capital, private or domestic nature. A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of travel between home and work is generally incurred to put the employee in a position to perform duties of employment, rather than in the performance of those duties (see paragraph 77 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses ). However, there are situations where it has been accepted that travel by employees from home to work is deductible. One of these situations is where you are required to transport bulky equipment. A car or motor vehicle is defined within the meaning of Section 995-1(1) of the ITAA 1997, to include a motor vehicle (except a motor cycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers. If you owned, leased or hired a utility truck or panel van with a carrying capacity of one tonne or more and used it for work purposes, you can claim the costs you incurred relating to the work use. It is accepted that you are required to carry bulky equipment between home and work. Therefore, you are entitled to a deduction for the actual costs you incur for business purposes. As your vehicle is not considered to be a car you cannot use the cents per kilometre method or any other method described in Division 28 of the ITAA 1997 to calculate your claim. Instead you are required to claim on an actual cost basis (using receipts) taking into account the business usage of the vehicle.

Relevant facts: You work as a sole trader working on contract providing services. | You are provided with secure storage where you work and you keep the maximum amount of equipment that will fit there. | You also carry additional equipment of between 150 and 200 kg with you depending on what you need for the day. | You carry the equipment in a vehicle with a carrying capacity of over one tonne.