Private ruling: Work related travel expenses
Date of advice: 8 September 2016
Published: October 2016
Ruling period: Year ended 30 June 2015.
Date scheme commenced: 1 July 2014.

Ruling: Q1: Are you entitled to a deduction for travel between your home and place of work for the relevant financial year? | A1: No.

Relevant facts and circumstances: You work in a very specialized job as a systems programmer. You are required by your employer to physically attend work. You cannot work from home as this is not allowed. There is no similar work in your local region. You do not receive a travel allowance from your employer. You carry a luggage bag containing your clothing, a computer bag and computer equipment.

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 or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a private or domestic nature. The case of Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478, (1958) 7 AITR 166, (1958) 11 ATD 404 settled the principle that travel to and from work is ordinarily not deductible. The Full High Court held that costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. The travel is considered to be of an essentially private or domestic 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. A deduction is not allowable if the equipment is transported to and from work as a matter of convenience or personal choice or if a secure area for the storage of equipment is provided at the workplace. 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, a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered as bulky, in the sense of cumbersome, in that the toolbox was not easily portable. The transport cost was attributable to the transportation of such bulky equipment rather than private travel between home and work. Also, the employer did not provide a secure storage area for the toolbox. 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. In your situation, you carry a luggage bag containing your private clothing, a computer bag and computer equipment with you when travelling between home and work. We consider the luggage bag containing your clothing as a private and domestic expense and not deductible under 8-1. The computer bag and computer equipment you carry is not sufficiently cumbersome or heavy to be considered bulky. Based on the decision in Crestani's case and Case 43/94 the computer bag and computer equipment is not considered to be of a size or weight that would make their transportation difficult. Therefore, you are not entitled to claim a deduction for your travel expenses to and from work as these expenses are considered private in nature.