Private ruling: Work related travel
Date of advice: 2 January 2019
Published: April 2019
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled a deduction for travel to and from your home and work? | A1: No.

Relevant facts and circumstances: You are self-employed and a sole trader in the medical field. You have worked in towns over X km from your home. You do a significant amount of study and business related work and all of your bookkeeping at your residence. There is nowhere closer to your home for you to work. You carry a medium sized suitcase containing medical equipment, including emergency supplies due to the likelihood of encountering a road traffic accident during your time travelling to and from work. X% of the equipment in the suitcase is needed for your day to day work. The suitcase does not contain any personal or non-medical equipment. The medical kit contains a comprehensive range of emergency medications, resuscitation kit, bandages and compresses. These are in addition to the medical supplies and equipment that you use in your work. You have considered your moral, legal and ethical obligations to stop and render assistance in the event of any accidents you may encounter. You are able to store some equipment where you work; however there are no secure storage facilities provided for your exclusive use. You do not receive calls regarding medical appointments at home.

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

Reasons for decision: Summary: You are not entitled to a deduction for expenses for your travel to and from your home to work as the expenses are considered private and domestic in nature. | Detailed Reasoning - Travel expenses: According to section 8-1 of the ITAA 1997, you can deduct a loss or outgoing if it is incurred in producing your assessable income except where the outgoing is of a capital, private or domestic nature. Generally the expenses of travel between work and home are not deductible ( Lunney & Haley v. Federal commissioner of Taxation (1958) 100 CLR 478; (1958) 11 ATD 404 ( Lunney’s Case) ). The general rule, as discussed in Taxation Ruling IT 2199 (IT 2199), is that travel between home and a person's regular place of employment or business is ordinarily private travel. While travel to work is a necessary pre-requisite to earning income, it is not undertaken in the course of earning that income. However there are situations where it has been accepted that travel from home to work is deductible. These are if: ● the taxpayer’s home constitutes a place of employment or business and the travel is to a work place to continue work ● the taxpayer is an itinerant worker ● the taxpayer has to transport bulky equipment necessary for work ● travel is between two places of work. The facts of your case indicate your home is not considered a place of business and your work does not commence before leaving home. Your income earning activities are not considered to be itinerant in nature and you do not travel between two places of employment. It is not considered that the work related equipment you carry is bulky in nature. You carry a suitcase with medical equipment which is primarily of use in an emergency situation, and only X% of the equipment is needed for your day to day work. 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 and the taxpayer was able to claim these expenses as a tax deduction due to the transporting of the tools. 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, 55 cm wide, 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 a medium sized suitcase, which holds only X% of equipment necessary for your daily income producing work. The rest of the contents of the suitcase are medical supplies which may be necessary for you to provide medical assistance in the case of an accident. The transport of these items is incidental to the primary purpose of transporting yourself to work. Similar to Case 43/94 we consider the X% of medical supplies, when separated from you’re the emergency equipment is not considered to be of a size or weight that would make their transportation 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. Therefore, the expenses you incur in travelling between home and the workplaces are private in nature. Accordingly, the expenses are not deductible under section 8-1 of the ITAA 1997.