Private ruling: Work related travel expenses
Date of advice: 15 December 2016
Published: May 2017
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for the cost of using your motor vehicle in travelling between home and work when you are required to carry a large amount of work related equipment? | A1: Yes | Q2: Are you entitled to a deduction for expenses incurred in travelling from your normal workplace to an alternative workplace? | A2: Yes

Relevant facts and circumstances: You work as a School Health Nurse. You work at four schools in total over a fortnight and are at a different school each day. You work at School A on Mondays, School B on Tuesdays, School A on Wednesday and either School C or School D on Thursdays. You are required to carry a large amount of work related equipment with you in your vehicle as you must travel to a different location each day. If you need to use your car for private use, for grocery shopping or collecting your children, you must empty your work equipment out first. Your work equipment that you need to carry everyday includes a laptop, a large suitcase, which contents include an Audiometer, eye testing equipment, procedure manuals and files, measuring 45cm x 60cm x 22cm and weighs 15.2kg, and a vision screening chart measuring 46cm x 52cm. In addition you are often required to also carry two other boxes carrying extra equipment measuring 30cm x 45cm. The total combined weight of your work equipment is 25kg. You have access to a shared work car that you are able to use two days per week for your longer journeys. To get to the car you must carry your work equipment in your car and then transfer all of the equipment to the work vehicle, you then transfer your equipment back to your vehicle at the end of the day. Although you are generally at one school per day you often have meetings at other locations while on duty.

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

Reasons for decision: Summary: You can claim a deduction for your work related travel in the following circumstances: ● when you are required to transport by vehicle your work equipment from home to work, or the work vehicle's location, as this equipment is considered bulky in nature, and ● the travel is to an alternative workplace. | Detailed Reasoning - Detailed reasoning: 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 such circumstance is where the employee is required to transport bulky tools or equipment that forms a necessary part of his employment. However, no deduction is 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 (Crestani's Case) , a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered to be bulky, in the sense of cumbersome, and was not easily portable. The travel cost incurred was attributable to the transportation of the bulky equipment rather than the private travel of the taxpayer between his home and workplace because the employer did not provide a secure storage area for the toolbox. Taxation Ruling IT 112 Deductibility of travelling expenses between residence and place of employment or business states that in cases comparable with FC of T v. Vogt 75 ATC 4073; 5 ATR 274 ( Vogt's Case ) travel expenditure will be deductible where the essential character of the expenditure is part of the operations by which the taxpayer earns their income; and there is no other practical way of getting their equipment to the places where they are to perform. In your case, you are a School Health Nurse at a number of schools. You are required to carry your work equipment with you as part of the operation by which you earn your assessable income. It would appear the only viable mode of transport is for you to use your own car to transport this equipment to carry out your duties as a School Health Nurse. Therefore, the travel has the essential character of expenditure incurred in gaining or producing your assessable income. The reason you transport your work equipment to and from work each day because you work at a number of different schools, being a different school each day. The weight of the work equipment is 25kg. Therefore with reference to Vogt's and Crestani's cases it is considered that your work equipment would constitute bulky equipment. As such the transport costs can therefore be attributed to the transportation of your work equipment rather than your private travel between home and work. Accordingly, you are entitled to a deduction under section 8-1 of the ITAA 1997 for the cost of transporting your work equipment to and from work. | Detailed Reasoning - Travel to an alternative workplace: Paragraph 4 of Taxation Ruling IT 2199 Income tax : allowable deductions : travelling expenses between place(s) of employment and/or place(s) of business states: Claims for income tax deduction for expenses incurred in travelling directly between two places of employment, two places of business or a place of employment and a place of business should be allowed where the taxpayer does not live at either of the places and the travel has been undertaken for the purpose of enabling the taxpayer to engage in income producing activities. As you are required to travel between two different workplaces for meetings on occasion, you are entitled to a deduction under section 8-1 of the ITAA 1997 for the expenses incurred during these trips.