Private ruling: Travel between home and work
Published: August 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for travel costs incurred in using your motor vehicle to transport your toolbox to and from work? | A1: No.

Relevant facts and circumstances: In order to undertake your employment duties, you require a number of tools that you must have with you each day. You use your personal motor vehicle to carry your toolbox each day. The dimensions of your toolbox are: · xxx mm in length · xxx mm in width · xxx mm in height · xx kilograms in weight You are provided with a work vehicle each day to carry out your tasks. Each day you transfer your tools and equipment from the toolbox in your personal vehicle to your work vehicle. The work vehicle has storage facilities for your tools and equipment that is with a lock. The work vehicle is then stored in a fenced facility overnight. The fencing is not electrified. You are able to store your tools and equipment in the work vehicle overnight. You are concerned with the level of security offered with the work vehicle. Due to the value of your equipment, you take your tools and equipment home with you each day.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Division 28

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. Division 28 of the ITAA 1997 specifically deals with deductions for car expenses. In order to be eligible to claim a deduction for car expenses, Division 28 requires that there be business kilometres, that is, kilometres the car travelled in the course of producing your assessable income. 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. However, the Commissioner accepts that expenses incurred by employees in travelling to and from work may be deductible in limited circumstances. Taxation Ruling TR 95/34 states that: A deduction may be allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work. If the equipment is transported to and from work by the employee as a matter of convenience or personal choice, it is considered that the transport costs are private and no deduction is allowable. A deduction is not allowable if a secure area for the storage of equipment is provided 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 equipment is considered bulky, consideration must be given to the size and weight of the equipment. In the case Crestani v. Federal Commissioner of Taxation (Cth) 98 ATC 2219; 40 ATR 1037 ( Crestani's case ) a toolbox which measured 57 x 28 x 25 centimetres and weighing 27 kilograms was considered bulky, in the sense of it being cumbersome and not easily portable, and the travel costs were attributable to the transportation of such bulky equipment rather than private travel between home and work. In that case the employer did not provide secure storage. In a Small Tax Claims Tribunal case, Millgate v Commissioner of Taxation [2000] AATA 1040 ( Millgate's case ), the taxpayer transported his toolboxes from home to work and back each day maintaining that security for his larger box was not adequate to enable him to leave it at the maintenance base. In Millgate's case it was noted that 'secure area' does not mean 'impregnable' and it may be possible for a toolbox to be stolen. The Tribunal found the area for storage of toolboxes at the taxpayer's workplace was adequately secure and therefore transport of the tools was only a matter of personal choice and not deductible. Your employer provides storage facilities with some measure of security. As noted in Millgate's case, secure storage does not mean a storage area that has no security issues. It may be possible for tools and equipment to be stolen. The facilities at your workplace are considered adequately secure. The dimensions of your toolbox are similar to the dimensions noted in Crestani's case and it is considered that your toolbox is bulky and cumbersome. However, the security of the storage at your workplace is adequate and it is a personal choice to transport the tools to and from home, rather than avail yourself of the facilities. Therefore you are not entitled to a deduction for motor vehicle expenses incurred in travelling between home and work.

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.