Private ruling: Work related expense - travel - bulky tools
Published: June 2012
Ruling period: Year ending 30 June 2012 | Year ending 30 June 2013 | Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016
Date scheme commenced: 01 July 2011

Ruling: Q1: Are you entitled to claim a deduction for the car expenses that you incur to transport bulky work related equipment between your home and workplace? Answer: Yes

Relevant facts and circumstances: You are an employee. You are required to have specific tools, clothing and equipment to carry out your employment activities. The total weight of these items is approximately 50 kilograms. There is no secure on-site storage available for you to store any of these items at your workplace. You store and transport these items in an aluminium storage box which is secured to your vehicle. You carry out your employment activities at three different locations. You are regularly required to transit between these workplaces during your shifts. You receive a travel allowance from your employer when you are required to travel between workplaces. Depending on work requirements you may require different tools, clothing or equipment to carry out your employment activities at the other workplaces.

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

Reasons for decision: Summary: Summary You are regularly required to transit between workplaces during your shift and as such it is necessary for you to have the required equipment on hand to enable you to carry out your employment activities. It is accepted that the combination of tools, clothing and work related equipment that you carry in your vehicle satisfies the requirement of bulky equipment. In addition to this as your employer does not provide any secure storage at your workplace, it is necessary for you to store and transport these items in your vehicle. Accordingly you are entitled to claim a deduction for the car expenses incurred to transport bulky work related equipment between your home and workplace. | Detailed Reasoning - Detailed reasoning: Section 8-1 of the Income Tax Assessment Act 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. 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 the transportation of bulky equipment in some circumstances. In the case of bulky equipment, the cost is attributed to the transportation of the bulky equipment rather than private travel between home and work where the transportation of the equipment is essential and is not done as a matter of personal choice or convenience and there is no secure storage provided at the workplace. In FCT v. Vogt 75 ATC 4073, 5 ATR 274, a professional musician was allowed deductions for motor vehicle expenses incurred by him in travelling between his place of residence and the various places at which he performed. The taxpayer in this case earned his income by performing at several places, on musical instruments and associated equipment on terms that he brought the instruments and equipment to the place of performance; the instruments and equipment were of substantial value; they were of a bulk which meant that they could be transported conveniently only by the use of a motor vehicle; the taxpayer kept the instruments and equipment at his residence for justifiable reasons of convenience and for the purposes of practising on them. The Court held that the essential character of the expenditure was such that it should be regarded as having been 'incurred in gaining or producing the assessable income' The Administrative Appeals Tribunal in Crestani v. FC of T 98 ATC 2219; 40 ATR 1037 ( Crestani ) found the taxpayer's toolbox measuring 25cm x 28cm x 57cm and weighing 27kg was bulky and cumbersome. In this case the taxpayer was an aircraft engineer who worked at Sydney Airport. They transported their toolbox home at the end of each shift as there was no secure storage at work and the tribunal held that the home to work travel was attributed to the transportation of these tools. The expenses incurred in transporting these tools were deductible and the taxpayer was simply one of those fortunate few who is able to hitch a free ride on his tool box . In your case, you are regularly required to transit between workplaces during your shift and as such it is necessary for you to have the required equipment on hand to enable you to carry out your employment activities. It is accepted that the combination of tools, clothing and work related equipment that you carry in your vehicle satisfies the requirement of bulky equipment. In addition to this as your employer does not provide any secure storage at your workplace, it is necessary for you to store and transport these items in your vehicle. Accordingly you are entitled to claim a deduction for the car expenses incurred to transport bulky work related equipment between your home and workplace.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.