Private ruling: Work related travel
Date of advice: 3 June 2016
Published: July 2016
Ruling period: Year ending 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Question and answer | Are you entitled to a deduction for fuel purchased for your work vehicle? | 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 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. Taxation ruling TR 95/22 Income tax: employee building workers - allowances, reimbursements, long service payments, redundancy trust payments and work-related deductions looks at transport expenses and travel between home and work . Transport expenses: Transport expenses include public transport fares and the running costs associated with using motor vehicles, motor cycles, bicycles, etc., for work-related travel. They do not include accommodation, meals, and incidental expenses. The treatment of transport expenses incurred by a building worker when travelling is considered below: Travel between home and work : A deduction is not allowable for the cost of travel between home and the normal work place as it is generally considered to be a private expense. This principle is not altered by the performance of incidental tasks en route. The principle is also not altered if the building worker is required to have a car available at work, uses a car because using public transport is impracticable, or is required to travel to work outside normal hours. Travel between home and work - transporting bulky equipment : A deduction is allowable if the transport expenses can be attributed to the transportation of bulky equipment rather than to private travel between home and work. A deduction is not allowable if the equipment is transported to and from work by the building worker as a matter of convenience. A deduction is not allowable if a secure area for the storage of equipment is provided at the workplace. A deduction is allowable if the transport costs can be attributed to the transportation of bulky equipment rather than to private travel between home and work. In order to establish that the deduction is allowable, the building worker must be able to first demonstrate that the equipment is bulky. If this is satisfied, it must then be established that the workplace is not secure enough to store the equipment while the building worker is absent. If the equipment is transported to and from work by the building worker as a matter of convenience or personal choice, it is considered that the transport costs are private and no deduction is allowable. Example: Charlie, a bricklayer, uses his car to travel to the work site each day in order to transport his trowels, levels, lines, hammer, mortar boards and other equipment. There is no secure place on site for storage of these items. Because of the bulk of this equipment, Charlie would be entitled to claim a deduction for his car expenses. You have advised that there is no storage available for the tools on site and that they must be carried on the vehicle at all times. Your employer has provided you with the vehicle so that you can carry the tools and travel to and from work. It is considered that the tools are bulky given the size of the toolboxes complete with tools. In your case your work vehicle was used solely to produce assessable income. Therefore, you are entitled to a deduction for the fuel expenses you incurred in relation to the operation of your work vehicle.

Relevant facts: Your employer supplies you with a vehicle to drive to and from work, 5 or 6 days a week. | You must carry your own work tools and tool boxes in the vehicle. | The toolboxes cannot be stored on site and must be kept in the back of the vehicle at all times for callouts, emergency breakdowns, and work at other sites. | Your weekly work pattern is 4 long shifts per week. | Your daily travel for work is a 200 km round trip. | The size of the toolboxes (there are two) you carry on the vehicle are as follows: | ● Large and are filled with tools. | You are required to pay for all fuel costs. | You are not reimbursed by your employer for your fuel expenses.