Private ruling: Travel expenses
Date of advice: 11 November 2015
Published: November 2015
Ruling period: Year ended 30 June 2015
Date scheme commenced: 1 July 2014

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

Relevant facts and circumstances: You are a fly-in fly-out worker. Your use various forms of transport to get to your departure point. You carry tools as well as personal protective equipment in addition to your normal luggage of clothes and other items required while you are away.

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. In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties that the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194). 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. (see paragraph 77 of Taxation Ruling TR 95/34) 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, for example a doctor on call who provides patient treatment advice over the phone before travelling to continue treatment of the patient in person; • where you travel between home and shifting places of work, that is, an itinerant occupation; and • the transportation of bulky equipment in some circumstances. Your work has not commenced before leaving home and you are not considered to be an itinerant worker. The case that established the principle that travel between home and work is deductible if the expense is attributed to the transport of bulky equipment is FC of T v. Vogt 75 ATC 4073, 5 ATR 274. In that case, the Supreme Court allowed a deduction for the travel as the taxpayer was required to transport the equipment between home and work and the items 'were of a bulk which meant they could be transported conveniently only by the use of a motor vehicle'. In Case U107 87 ATC 650; AAT Case 75 18 ATR 3544, a ground maintenance engineer was allowed a deduction for the expense of transporting his tools to and from the airport on the grounds that the two substantial tool boxes were of such size and weight that they could not reasonably have been transported on public transport. In Case N34 81 ATC 178, Board of Review Member Beck stated that for a deduction to be allowable for travel between home and work for transporting equipment, 'it must be shown that it is too heavy and/or too bulky for reasonable people to expect it to be carried by the taxpayer in public transport'. These cases demonstrate that equipment will be considered bulky if it is too bulky to be reasonably expected to be transported on public transport. In your case, you travel by various forms of transport between your home and the departure point to your worksite. Given that you transport your items of baggage each shift using multiple forms of public transport, it is clear that these items are not so bulky that they cannot be reasonably transported on public transport. Therefore, these items are not considered to be bulky for the purpose of claiming a deduction for travel between home and work. Even if your items were considered to be bulky, when travelling by public transport, the cost of a ticket or fare 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 and therefore you have not incurred any expenses in transporting the tools and the travel is considered private in nature. Consequently you are not entitled to a deduction for your travel expenses under section 8-1 of the ITAA 1997.