Private ruling: Travel expenses
Published: February 2014
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the expenses you incur for travel between home and work? | A1: Yes


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) deals with general deductions and 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 capital, private or domestic nature. Generally the expenses of travel to and from work are not deductible. This is either because such expenditure is private in nature, or because it is not an expense incurred in gaining or producing assessable income. The case of Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478; (1958) 7 AITR 166; (1958) 11 ATD 404 settled the principle that travel to and from work is ordinarily not deductible. The Full High Court held that costs incurred by a taxpayer in travelling to the place where they work are expenses incurred in order to enable them to earn income but are not expenses incurred in the course of earning that income. The travel is considered to be of an essentially private or domestic nature. However, the Commissioner accepts that expenses incurred by employees in travelling to and from work are deductible in certain circumstances. One of the exceptions to the general view is where the employee is required to transport bulky equipment necessary for employment. Paragraphs 63 and 64 of Taxation Ruling TR 95/34 explain that a deduction may be allowed in circumstances where: · the cost can be attributed to the transportation of bulky equipment rather than to private travel between home and work · it is essential to transport the equipment to and from work and it is not done as a matter of convenience or personal choice, and · there are no secure facilities available for storage of the bulky equipment at the work place. The question of what constitutes bulky equipment must be considered according to the individual circumstances in each case. To establish if the work items you carry are bulky, consideration must be given to its size and weight. In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037 (Crestani's Case) , a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered as bulky, in the sense of cumbersome, and the transport cost was attributable to the transportation of such bulky equipment rather than private travel between home and work. The employer did not provide a secure storage area for the toolbox and the use of public transport was not a viable option. In your circumstances, it is accepted that your work items are sufficiently bulky and your travel between home and work is attributed to the carriage of these items. You are therefore entitled to a deduction for the cost of this travel.

Relevant facts: You were employed in a particular role and on a daily basis you were responsible for the co-ordination, management and supervision of a number of employees on different worksites. | Part of your responsibilities was to report to head office on a weekly basis, on job costings and payroll hours. | There were office facilities at the work sites and the office blocks were shared with other companies. | There were no lockable files or storage cabinets to keep the reports or other documentation and equipment safe. | You had access to sensitive information in regards to costings and employee payroll information. | The offices were open 24 hours a day as work was being performed during the day and night as well as weekends. | No computer equipment was provided and you therefore had to on a daily basis transport your laptop and relevant paperwork from home to work and the other worksites. | Your paperwork was carried in x large boxes weighing at least xx kgs each, as well as your laptop. | You also carried an additional larger box weighing at least xx kgs. | You had to bring home all the relevant paperwork to be able to complete this reporting at the end of the week.