Private ruling: Travel expenses-Bulky tools
Published: December 2012
Ruling period: Year ended 30 June 2010 | Year ended 30 June 2011 | Year ended 30 June 2012
Date scheme commenced: 1 July 2009

Ruling: Q1: Are you entitled to a deduction for the cost of transporting bulky tools between home and various workplaces? | 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) 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 private or domestic nature. The case of Lunney 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. A deduction is not allowable if the equipment is transported to and from work as a matter of convenience or personal choice or if a secure area for the storage of equipment is provided at the workplace. The question of what constitutes bulky equipment must be considered according to the individual circumstances in each case. In Crestani v. FC of T 98 ATC 2219; (1998) 40 ATR 1037, a toolbox which measured 57 x 28 x 25 centimetres and weighed 27 kilograms was considered as bulky, in the sense of cumbersome, in that the toolbox was not easily portable. The transport cost was attributable to the transportation of such bulky equipment rather than private travel between home and work. Also, the employer did not provide a secure storage area for the toolbox. In your case, you carry various tools you use to perform your duties including two toolboxes measuring 35 x 75 x 30 centimetres and weighing approximately xx kilograms each. Your equipment is considered to be bulky. You do not work at the same worksite every week. You transport your tools to and from work not as a matter of convenience or personal choice, but as a matter of necessity. The transport costs can be attributed to the transportation of your tools rather than private travel between home and work. Therefore, you are entitled to a deduction under section 8-1 of the ITAA 1997 for the cost of transporting bulky tools between home and your various workplaces.

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. | Relevant facts: You work in a particular trade. | You are required to travel between xx to xx kilometres each way from your home to your place of work on a weekly basis. | You own a vehicle with a large tool locker bolted to the tray to house your tool boxes. | You are employed on a project to project basis at several worksites. | The equipment you carry includes two toolboxes complete with various tools required to complete your work, measuring 35 x 75 x 30 centimetres and weighing approximately xx kilograms each. | There is no individual lockable storage onsite for these tools and your employer does not reimburse employees in the event tools are stolen. | Your employer does not provide you with a vehicle to transport your tools to the worksite. | On arriving at the worksite your tools must be removed from your vehicle and placed into a work vehicle for access to the site. | The weight and dimensions of the toolboxes requires at least two people to transfer these between vehicles. | When at home your tools stay locked in the back of your vehicle.