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Can a taxpayer claim a deduction under section 8-1 of the Income Tax Assessment Act 1997 ('ITAA 1997') for the cost of using their motor vehicle to transport bulky tools to and from work where no secure storage facilities are available at their place of work?

Yes. The cost of transporting tools that are considered to be bulky is deductible under section 8-1 of the ITAA 1997 where no secure storage facilities are provided at the taxpayer's place of work.

The taxpayer is an employee.

In order for the taxpayer to perform their duties, they are required to use various tools.

These tools are kept in a toolbox, which the Commissioner accepts as bulky.

There are no storage facilities for the taxpayer to store their tools at their place of work.

The taxpayer travels from home to their place of work and back again on a daily basis transporting their toolbox.

Section 8-1 of the 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 capital, private or domestic nature.

The case of Lunney & Hayley 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 under section 8-1 of the ITAA 1997. The travel is not considered to be incurred in gaining or producing assessable income.

This principle was clarified in FC of T v. Vogt (1975) 5 ATR 274; 75 ATC 4073 ( Vogt's Case ). In this case, a deduction was allowed because the expense could be attributed to the transportation of bulky equipment (musical instruments) to varying places of work, rather than to private travel between home and work.

The principle was further clarified in Case U107 87 ATC 650; Tribunal Case 75 (1987) 18 ATR 3544;. In this case, there was a single place of employment with storage facilities provided at the place of work. The taxpayer chose to take his tools home with him each day, as the storage facilities were not secure. The Administrative Appeals Tribunal (AAT) confirmed that the principle in Vogt's Case applied in these circumstances. The AAT noted that the following factors should be considered in transportation of tools cases: • security of the storage facilities • the taxpayer's personal choice to carry the tools (is there a reasonable alternative); and • the size and weight of the tools and alternative forms of transportation.

These tests have been applied in a number of subsequent cases: Case Z22 92 ATC 230; AAT Case 7944 (1992) 23 ATR 1189, Crestani v. Federal Commissioner of Taxation (1998) 40 ATR 1037; 98 ATC 2219.

In each of these cases, the security of the workplace storage facilities (when it was established the tools were bulky) was the determinative factor. Where there was concern over the safety of the tools in the workplace facility, the deduction was allowed. Where a secure environment was provided (and this did not mean 'impregnable'), the deduction was not allowed.

The AAT consistently found that the employment created a need for the taxpayer to transport the tools to and from work where security was inadequate. Where security was adequate the AAT found that it was the personal choice of the taxpayer to transport the tools to and from home, rather than avail themselves of the facilities (ATOID 2001/184).

As there are no secure storage facilities provided by the employer and the tools which the taxpayer transports are considered to be 'bulky' the cost of using their motor vehicle to transport tools to and from work is deductible under section 8-1 of the ITAA 1997.