Private ruling: Travel
Published: November 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 air fares between State A and City B? | A1: No. | Q2: Are you entitled to a deduction for the portion of excess luggage costs that relate to transporting your equipment? | A2: 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 deals with general deductions and 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 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 (paragraph 77 of Taxation Ruling TR 95/34). The mode of transport, the availability of transport, the distance travelled and the necessity of travel do not alter the essential character of travel between home and work as being private in nature. However, there are situations where it has been accepted that travel by employees from home to work is deductible. These situations include: • where the employment can be construed as having commenced at the time of leaving home, • where you travel between home and shifting places of work, that is, an itinerant occupation, and • the transportation of bulky equipment in some circumstances. • 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 25cm x 28cm x 57cm and weighing 27kg 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 and the taxpayer was simply one of those fortunate few who is able to hitch a free ride on his tool box. 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 provided at the workplace. In your situation, you take equipment with you when travelling between State A and City B as your employer does not provide a secure storage for your tools. When travelling by plane, the cost of a plane flight is considered to be the expense enabling you to travel as a passenger. As a passenger, you are also entitled to carry a certain quantity of luggage with you. Your tools are hitching a ride with you. Therefore you have not incurred any expenses in transporting the tools apart from the excess luggage fees. The travel is considered private in nature. Consequently no deduction is allowable for the cost of your plane tickets. However, when you are transporting equipment and as a result, you incur excess baggage costs, you are entitled to a deduction for the portion of the excess baggage cost that relates to transporting your equipment.

You are employed to work in State B and your employer pays for return flights from City A to the work site. | You pay for your own flights from City B to State A. | You carry equipment weighing approximately 20 kg and carried in a bag measuring 900cm X 400 cm X 400 cm with you when you travel. | There is no secure storage at the work site to keep your equipment