Private ruling: Work related vehicle expenses
Date of advice: 8 September 2020
Published: October 2020
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you able to claim your home to work travel in accordance with section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) due to travelling between co-existing work locations? | A1: No. | Q2: Are you able to claim your home to work travel in accordance with section 8-1 of the ITAA 1997 for the transport bulky tools from home to your worksite? | A2: Yes. Your travel expenses are deductible, as it is accepted the equipment meets the requirements detailed in Taxation Ruling TR 95/19 Income tax: airline industry employees - allowances, reimbursements and work-related deductions. Further information about travel expenses can be found by searching 'QC 31983' on ato.gov.au

Relevant facts and circumstances: You are employed as a pilot. You carry a navigational bag. After adding all the required items that you are required to carry, it weighs approximately XX kilograms. You also use a larger suitcase (weighing approximately XX kilograms). The items you carry in this bag are work shirts, work pants, work socks, work jumper, and other private items. It is company policy that you cannot wear uniforms when you're not on duty. Your employer does not provide a secure storage area. You transport the bags in your own car between your home and work and incur expenses relating to this travel. You log onto the company intranet at home to print the daily Briefing Report and the Aircraft defect service register. You also check weather forecasts, Notice to Airmen (NOTAMS), significant weather charts (SIGWX), significant meteorological information charts (SIGMET), Grid Point Wind charts and the assigned aircraft for the day. Sometimes it is necessary for you to call the company and get the aircraft changed prior to driving to work if the aircraft won't be suitable for the flying you will be doing on the day. You then travel to the airport to continue your employment duties.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 25-100

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for a loss or outgoing to the extent to which it is incurred in gaining or producing assessable income, except where the loss or outgoing is of a capital, private or domestic nature, or relates 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 (Lunney v. Federal Commissioner of Taxation (1958) 100 CLR 478; 11 ATD 404) (Taxation Ruling IT 112). The cost of travelling 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. Put at its simplest, travel to work is private; travel on work is business. It should be noted that the mode of transport, the availability of transport, the lack of suitable public transport, the erratic times of employment, the time of travel, the distance of travel and the necessity of travel does not alter the essential character of travel between home and work as being private in nature. However, a deduction for car expenses between home and work may be allowed if a person's job starts in one location and they travel to another location for the purposes of carrying out your employment duties or if the taxpayer is transporting bulky tools to their workplace. | Detailed Reasoning - Co-existing work locations: Draft Taxation Ruling TR 2017/D6 Income tax and fringe benefits tax: when are deductions allowed for employees' travel expenses? applies to travel between work locations of the same employer as well as to travel between home and a work location. In this draft Ruling, a work locationis any place an employee attends for work. Paragraph 43 of draft TR 2017/D6 states that co-existing work location travel is attributable to a employee having to work in more than one work location: Co-existing work locations travel involves travel which can be attributed to the employee having to work in more than one location. This is the case where: the travel is directly between work locations, or between home and an alternative work location, and it is reasonable to conclude that the travel is undertaken in performing the employee's work activities because of the requirement to work in more than one location. This is the case where the travel is directly between work locations or between home and an alternative work location and it is reasonable to conclude that the travel is undertaken in performing the employee's work activities because of the requirement to work in more than one location. Paragraph 44 goes onto state that for the purposes of co-existing work locations travel an alternative work location is a work location other than a regular work location near the employee's home and paragraph 45 states that travel in this category is attributable to the employee having to work in more than one place, rather than their choice about where to live. You advise that you commence working from home by logging on to the company intranet and print the daily Briefing Report and the Aircraft defect service register. You advise that you also check weather forecasts, Notice to Airmen (NOTAMS), significant weather charts (SIGWX), significant meteorological information charts (SIGMET), Grid Point Wind charts, assigned aircraft for the day and that sometimes it is necessary for you to call the company and get the aircraft changed prior to driving to work if the aircraft won't be suitable for the flying you will be doing on the day. You then travel to the airport to continue your employment duties. Your employment contract does not specify that you are required to work from home or that your home is considered an additional workplace. Additionally, the duties you perform at home are minimal tasks and do not take up a significant part of your working day. Therefore, your home cannot be considered a co-existing work location for the purposes of draft TR 2017/D6. Your case is comparable to example 1 in TR 2017/D6 where the taxpayer frequently checks and responds to work emails at home. The taxpayer may at times spend an hour or more working at home either before travelling into the office or after they returns home in the evening. The travel is not undertaken by you in performing your duties. Your travel expenses are not deductible because: · You are not required to start work at home and to travel to continue work at the office: you have chosen to start work at home, rather than at your regular work location, and · the trip between your home and the office is a normal daily journey, reflecting your private choice about where to live (paragraph 36 of draft Ruling TR 2017/D6). Your expenses were incurred as a result of your private choice about where to live and were not incurred in the actual performance of your work duties. Your home cannot be considered a co-existing work location. The expenses you incurred were expenses of a private or domestic nature. You are not entitled to a deduction for your expenses under section 8-1 of the ITAA 1997, as the expenses were not incurred in gaining or producing assessable income and were expenses of a private or domestic nature. | Detailed Reasoning - Bulky tools: Taxation Ruling TR 95/19 Income tax: airline industry employees - allowances, reimbursements and work-related deductions discusses deductions for airline employees and states that a deduction is not allowable for the cost of travel including tolls incurred when airline employees are travelling between their home and their normal place of employment. The cost of that travel is a private expense and the tolls therefore have the same private character. 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 · where you travel between home and shifting places of work, that is, an itinerant occupation · the transportation of bulky equipment in some circumstances. Paragraph 140 discusses the issue of the transport of bulky tools by a ground maintenance engineer in case U107 87 ATC 650; AAT Case 75 18 ATR 3544. 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. The Tribunal was of the opinion that the security provided was not sufficient. The size and weight of your navigation bag and suitcase are substantial and your case is comparable to that of U107 87 ATC 650; AAT Case 75 18 ATR 3544. Therefore, on the provision that you are transporting your bulky tools, you are able to claim a deduction for your transport costs in accordance with section 8-1 of the ITAA 1997.