Private ruling: Travel expenses
Date of advice: 30 October 2017
Published: March 2018
Ruling period: Year ended 30 June 2017 | Year ended 30 June 2018 | Year ended 30 June 2019 | Year ended 30 June 2020 | Year ended 30 June 2021
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for motor vehicle expenses for travel between your home address and a meeting point to fly out for work? | A1: No. | Q2: Are you entitled to a deduction for airfare expenses for travel between your home and a meeting point to fly out for work? | A2: No.

Relevant facts and circumstances: Your position requires you to have on you at all times a laptop, portable printer, hard hat , work appropriate boots, portable two-way radio system as well as your required uniform and folders and forms associated with your work. You are part of a migratory gang in that you are in different places throughout the whole of the year. You are never in the same place for longer than 1-2 months at a time (sometimes shorter). You currently work 10 days on and 4 days off. Being that you are a migratory gang, the members are located all over the state and meet together at a central point in order to commence your travel. From there you fly or drive work supplied vehicles to where you are scheduled to work for that block. Your flights and vehicle transport is supplied by your employer from this point. Prior to this it is your own responsibility to get to where your meeting point is. Your home depot does not facilitate a locker or storage facility for the storage of the required items that you have to travel with you nor does any other depot you travel to. The required items which you are required to travel with both to your starting point of employment and through your travels home weigh approximately as follows: (a) Laptop – 1.3kg. 30cm x 25cm (b) Portable printer – 1.2kg. 35cm x 18cm (c) Hardhat – 900gm. 30cm x 40cm (d) Steel cap work boots – 2.4kg (rough together) 45cm x 8cm (each) (e) Portable two-way radio system – 1.9kg. 15cm x 8cm (f) Uniforms – 6kg (all together) 45cm x 45cm (g) Folders/forms associated with your position to be completed daily – 1.8kg. 45cm x 20cm x 12cm You are required to return home with these items as the day before you depart to leave back to work you are required to receive by email and print all associated forms/details of work required for your starting day back at work. The items are all stored in a bag that is approximately 120cm x 45cm. You travelled between your home and a meeting point by plane for a period of time due to your car needing repairs.

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 gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. Generally, travel between a taxpayer’s home and place of work is considered to be private and domestic in nature and the cost of such travel is not deductible under the provisions of section 8-1 of the ITAA 1997. This is an established principle of law ( Lunney v. Commissioner of Taxation [1958] ALR 225;1958 - 0311H - HCA;100 CLR 478;(1958) 11 ATD 404;(1958) 32 ALJR 139). One of the exceptions to this general principle is when an employee is required to transport bulky equipment necessary for their employment. In such cases, a deduction for the cost of transporting that bulky equipment may be available provided some other requirements are met. The basic requirements for a deduction to be allowed for the cost of transporting bulky equipment between a taxpayer’s home and their place of work are detailed in paragraphs 63 and 64 of Taxation Ruling TR 95/34 Income tax: employees carrying out itinerant work - deductions, allowances and reimbursements for transport expenses . Essentially the basic requirements detailed in the paragraphs referred to are: ● the equipment being transported is bulky, ● the equipment is not being transported as a matter of convenience or personal choice, and ● there is no secure storage for the equipment at the workplace. For a deduction to be allowed the equipment must first be shown to be bulky. There is no definition in the tax law as to what constitutes bulky equipment so case law must be taken into account when considering this issue. There are several cases with relevance to your situation. Crestani v. FC of T 98 ATC 2219; 40 ATR 1037 (Crestani’s case) found a tool box that contained an aircraft engineer’s specialist tools was bulky and a deduction for the cost associated with transporting that tool box between the taxpayer’s home and place of work was allowed. Nothing else was being transported (at least in terms of the claim for a deduction on the basis of transporting bulky equipment). Although not particularly large, the tool box in Crestani’s case was found to be ‘bulky’ because it was heavy (it weighed approximately 27 kilograms) and therefore was cumbersome and not easily portable. The Tribunal found that rather than bulkiness being determined by the size of an object, the term was more aptly applied to something that was ‘cumbersome in the sense that it was not easily portable’. The tool box qualified because although it was small, it was heavy and difficult to carry. 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 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 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, the equipment that you carry is contained in a bag which measures 120cm x 45cm and is used to carry items which have a combined weight of approximately 15.5 kilograms. Your situation is comparable to the facts in Case 43/94. Therefore, your equipment is not considered to be of sufficient size and weight to be characterised as bulky equipment. That is, it is not considered that the transportation of your equipment transforms your travel from being private to work related in nature. Therefore, you are not entitled to a deduction for transporting your equipment under section 8-1 of the ITAA 1997.

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