Claiming eligible deductions

To ensure individual taxpayers are claiming deductions eligible under the tax law, the Australian Tax Office (ATO) places certain emphasis on particular areas each year. Work related travel expense for transporting bulky tools or equipment is one of the frequent topics under the ATO’s spotlight.

Generally, expenses incurred by a taxpayer for travelling between home and the workplace are not deductible as this is considered to be a private purpose. However, there are some exceptions. If you transport bulky tools and equipment required for work, the related motor vehicle and travel expenses might be deductible, provided that certain requirements are met:

  • It is essential to carry the tools and equipment for work as there is no other practical method to access them in the workplace. This would apply to individuals whose work is typically carried out off-site.
  • The equipment transported is bulky in the sense of being cumbersome, and
  • There is no secure place at work for the taxpayer to store the bulky equipment.

Generally, tools and equipment that weigh in excess of 15-20kg are considered as bulky and cumbersome to carry.

The deduction can only be claimed where the transportation of tools is expected by the employer, or it is a practical necessity for the tools to be readily available at each work site for the taxpayer.

Further, the security of equipment in the workplace is also one of the determinative factors. It must be established that the employer or off-site workplace has no secure facilities provided to store the tools and equipment outside of working hours. The Taxpayer cannot just transport the tools as a matter of convenience or personal choice. Otherwise, the travel expense would be considered to be for private purposes and no deduction is allowable.

In certain circumstances the ATO will contact the employer to verify the taxpayer’s claims. Therefore, to claim work related travel expenses correctly for transporting bulky tools, it is recommended that you have considered all the above factors.

If you need help in understanding the above, please contact one of our tax accountants at The Quinn Group on (02) 9223 9166 or submit an online enquiry.