Private ruling: Home to work travel
Published: January 2014
Ruling period: Year ended 30 June 2012 | Year ended 30 June 2013 | Year ended 30 June 2014 | Year ended 30 June 2015 | Year ended 30 June 2016
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for home to work travel? | A1: No.


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

Reasons for decision: Summary: You are not allowed a deduction for your car expenses under section 8-1 of the ITAA 1997 for carrying your equipment and personal belongings from home to work as your work equipment is not considered to be bulky. | Detailed Reasoning - Detailed reasoning: 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, or relate to the earning of exempt income. A deduction is generally not allowable for the cost of travel between home and work because the expenses are not considered to be incurred in producing assessable income. These expenses are incurred as a consequence of living in one place and working in another and any expenses incurred to enable a taxpayer to commence their income earning activities are therefore considered private in nature. The case of Lunney v. Commissioner of Taxation [1958] ALR 225;1958 - 0311H - HCA;100 CLR 478;(1958) 11 ATD 404;(1958) 32 ALJR 139 settled the principle that travel to and from work is ordinarily not deductible. This travel is considered to be of an essentially private or domestic nature. Taxation Ruling TR 95/19 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. In your situation, your work has not commenced before leaving home and you are not considered itinerant. However you do carry an oversized briefcase containing equipment and reference materials, and personal luggage containing work clothing and personal items while travelling between home and work, therefore the issue of bulky equipment will be addressed further. The question of what constitutes bulky equipment is a question of fact and must be considered according to the individual circumstances of each case. The principle of bulky equipment was established in the case of FC of T v. Vogt 75 ATC 4073. In that case, the taxpayer was a musician who worked at a suburban RSL club as a member of a well-known band. He kept his instruments (a trumpet, flugelhorn, acoustic bass guitar, electric bass guitar and amplifiers) at home because it was essential to practice on them, and it was the only practicable place to keep them. He used his car, a station wagon, to transport the instruments between his place of residence and the various places where he worked and where he was engaged to play. It was found that Vogt's income was earned not only by performing as a musician but also by providing valuable musical instruments. The expenditure was said to be attributed to the carriage of this significant amount of work equipment rather than to his own travel. Conversely in Case L49 79 ATC 339; 23 CTBR (NS) Case 56 ( Case L49 ), an airline pilot was not allowed a deduction for expenses incurred in transporting luggage to and from the airport. The taxpayer's duties commenced when he 'signed on' at the airport for a flight or, on other occasions of mandatory attendance, on arrival at the airport. In this case, Board Member Mr M B Hogan stated (ATC at 342; CTBR at 469): The taxpayer had the normal accoutrements of a travelling businessman, a bulky suitcase and a hand satchel. But this bulk is hardly such as to suggest that the accoutrements were being transported primarily, and that the taxpayer obtained an incidental (and "tax free") ride. Nor, of course, are the businessman's personal accoutrements the equivalent of ``plant'' employed by [the taxpayer] in the production of his assessable income. In Case 43/94 94 ATC 387 ( Case 43/94 ) a flight sergeant with the Royal Australian Air Force was denied a deduction for the cost of transporting his flying suit and other items including charts, work manuals and study materials used for work purposes. It was considered that the duffle bag was not of sufficient size or weight to impede facile transport. It was held that the mode of transporting the items was simply a consequence of the means adopted by the taxpayer to convey him to work. You carry both work equipment and personal items between your home and your workplace; similar to Case L49 and Case 43/94. Sciberras and Commissioner of Taxation [2011] AATA 509 ( Sciberras' Case ) addressed the issue of whether the equipment transported by the taxpayer was necessary for their employment. The case considered the matter of a fuel tanker driver who carried manuals, tools and gear in addition to personal protective equipment which he claimed were necessary for his work as a driver. In Sciberras' Case Senior Member Letcher stated: A common thread in the cases where an exception to the general rule is found to exist is that the equipment is an essential part of the work being specialist tools suited to the task or items intrinsically involved in the work. In the case, the tools, clothing and manuals were not essentials used in the driving work, nor were they items without which the work could not be done, nor were they required by the contract of employment or provision of law. The relevant exception to the general principle may be stated as follows (in the case of transport equipment) and satisfied if: (a) It is an integral part of the income-earning activity; (b) It is essential to the performance of the work; (c) The expense is incurred as the only practical means of transporting it; and (d) There is no secure alternative to transporting it. Each of the above criteria must be satisfied. Of particular importance in Sciberras' Case is the fact that the Tribunal found that items of non-essential work equipment could not be taken into consideration when determining whether or not bulky equipment is being transported between a taxpayer's home and workplace. Application to your circumstances In your case, you are required to carry an oversized briefcase containing various manuals, torch and other safety equipment, company documents and an iPad. You also carry other luggage containing uniforms, a laptop bag and personal items. There are no secure facilities available at work. In regards to your other luggage, like the airline pilot in Case L49 it is considered you're simply carrying the normal personal accoutrements of a travelling businessman, and it is not plant used in the production of your assessable income. Sciberras' Case stated that items of non-essential work equipment could not be taken into consideration when determining whether or not bulky equipment is being transported between a taxpayer's home and workplace. You carry both work equipment and personal items between your home and your workplace; similar to Case 43/94 , we consider the work equipment when separated from your personal effects is not considered to be of a size or weight that would make their transportation difficult. Thus, the equipment carried is not considered to be of such bulk that it would change the primary purpose of your travel from one of transporting yourself to and from work to one of transporting the equipment. Also, the lack of secure storage at your work is not sufficient consideration, as a deduction is only allowable when it is established the tools or equipment are bulky. Therefore, after giving consideration to the principles noted above, you are not allowed a deduction for your car expenses under 8-1 of the ITAA 1997 for carrying your equipment and personal belongings from home to work.

You cannot rely on the rulings in the Register of private binding rulings in your tax affairs. You can only rely on a private ruling that we have given to you or to someone acting on your behalf. | The Register of private binding rulings is a public record of private rulings issued by the ATO. The register is an historical record of rulings, and we do not update it to reflect changes in the law or our policies. | The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions. | You are required to carry a briefcase which contains manuals, maps and charts, torch and other safety equipment among other things. The briefcase weighs approximately 11 kg. | There is no secure storage available at your work place. | Where your duty includes an overnight stay, you carry an additional bag containing uniform, clothing and toiletries.