Private ruling: Travel between home and work
Published: July 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to claim a deduction for the cost of travelling between home and work? | A1: No.


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

Reasons for decision: Summary: It is considered that the transport of your tools to and from work is done as a matter of personal choice. Therefore, the transport costs are not deductible. | Detailed Reasoning - Detailed reasoning: Section 8-1 of the Income Tax Assessment Act 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 and Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478 settled the principle that travel to and from work is ordinarily not deductible as this travel is considered to be of an essentially private or domestic nature. However, the courts have allowed for a limited number of exceptions. One of these exceptions is where bulky tools are being transported between home and work as a matter of necessity rather than personal choice. The case of Millgate v. Commissioner of Taxation [2000] AATA 1040 is relevant in your situation. The taxpayer was a licensed aircraft mechanical engineer who transported his toolbox from home to work and back each day maintaining that security was not adequate to enable him to leave it at the maintenance base. Thefts had occurred in the past at the maintenance base. The employer did not have an alarm fitted in the storage area but did provide an area where the toolbox could be chained to steel A-frames. When the AAT attended the work site, the taxpayer demonstrated that the chain and lock could be cut using the tools available in the general work shop area and contended that this made the area insecure. The Tribunal found that even though it was possible to cut the chain and for a toolbox to be stolen, the area was adequately secure. It stated that 'secure area' does not mean 'impregnable'. The Tribunal held that as the area for storage of toolboxes at the taxpayer's workplace was adequately secure, the transport of the tools was only a matter of personal choice and therefore not deductible. In your case your employer provides you with a wooden locker for the storage of your tools. This locker is inside a shed which is locked at night. Some staff use these lockers to store their tools while others use their vehicles. You have chosen not to use these lockers. Although a wooden locker in a locked shed may not be 'impregnable', it is considered to be adequately secure. Your transport of your tools between home and work is considered to be a matter of personal choice and therefore the costs of doing so are not deductible. As the transport of your tools is considered to be a matter of personal choice it is not necessary to determine whether your tools are bulky.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Relevant facts: You carry your tools in your own vehicle to and from work every day. | Your employer has supplied lockers for employees to store their tools. | Some employees use these lockers to store their equipment and others lock tools in their car. | You have chosen not to use these lockers and take your tools home each night as you feel they are insecure. | The lockers are made of plywood with screwed hinges. | The lockers are inside a large shed which is locked each night. | There have been thefts from the depot in the past. The thefts were opportunistic in nature with the thieves stealing whatever they could see of value.