Private ruling: Work related expenses
Published: September 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for the expenses incurred repairing a work vehicle? | A1: Yes.

Relevant facts and circumstances: You had use of a work vehicle. Whilst driving during the course of your employment the vehicle incurred damage. Your employer required you to pay the repair bill.

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 or outgoings to the extent that they are incurred in gaining or producing assessable income. However, no deduction is allowable where the losses or outgoings are of a capital, private or domestic nature. Expenditure in the form of compensation or damages paid to third parties will be an allowable deduction under section 8-1 of the ITAA 1997 to the extent that it is incurred in the course of gaining or producing assessable income, and the expense is not of a capital, private or domestic nature. In your case your employer's work vehicle incurred damage while you were driving during the course of your employment. As the damage occurred in the course of producing assessable income, the expenses associated with the liability to pay for the damage to your employer's vehicle are incidental and relevant to the production of that assessable income and are not of a capital, private or domestic nature. Therefore, you are entitled to a deduction for costs incurred as a result of damage caused to the vehicle.