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Is the taxpayer, a meatworker, entitled to claim a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for expenses incurred in transporting knives between home and work?

No, the taxpayer, a meatworker, is not entitled to claim a deduction under section 8-1 of the ITAA 1997 for expenses incurred in transporting knives between home and work.

The taxpayer is a meatworker who is required to use knives in the course of employment.

The taxpayer must take the knives home at the end of each shift to avoid cross contamination.

It is illegal to carry knives on public transport and so the taxpayer uses his private motor vehicle to travel between home and work.

Section 8-1 of the 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.

Expenses of travelling from home to work are generally not deductible ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478), as the expenses are not incurred in the course of gaining assessable income. Rather, the expenses are incurred to enable the taxpayer to commence income earning activities. The travel expenses are generally considered to be private in nature.

However, a deduction may be allowable if the transport costs can be attributed to the transportation of bulky equipment ( FC of T v. Vogt 75 ATC 4073; 5 ATR 274).

Taxation Ruling TR 95/11, which relates to hospitality industry employees, provides the example of a chef who takes their knives home at the end of each day. The chef is not considered to be transporting bulky equipment and is therefore not entitled to a deduction.

Similarly, the taxpayer's knives are not considered to be bulky. Accordingly, the taxpayer is not entitled to claim expenditure incurred in transporting knives to work under section 8-1 of the ITAA 1997. The illegality of carrying knives on public transport, consequently requiring the taxpayer to transport them in a private motor vehicle, is not a relevant consideration in determining the deductibility of the expenses ( Case L49 79 ATC 339; (1979) 23 CTBR (NS) 467).