A taxpayer has been denied a deduction for car expenses incurred in transporting equipment to and from work, partly because the storage facilities at her workplace were adequate: Re Rafferty and FCT [2017] AATA 636, AAT No 2015/3723. 


The taxpayer was employed as a stevedore. In the income year in question (2012–2013), she mostly drove a straddle (a piece of machinery used for lifting containers) or performed clerical work. She claimed a deduction of $22,147 for work-related car expenses, arguing that she was required to carry bulky tools and equipment (protective clothing and equipment provided by her employer; shirts and trousers) to and from work. The essence of her claim was that she took the clothing and equipment home for cleaning and maintenance. The Commissioner disagreed and issued an amended assessment disallowing the deduction and imposing an administrative penalty of 25% of the tax shortfall.

The taxpayer said that it was not uncommon for her to perform more than one role in a shift, nor was it uncommon for this to create the need to change clothing between tasks due to contamination from grease and sweat. She was therefore required to have a greater range of personal protective equipment, including wet weather gear, than might normally have been expected.

The Administrative Appeals Tribunal (AAT) decided that it was not necessary for the taxpayer to take home her hard hat, safety glasses, hearing protection or headlight in order to clean them. In addition, her overalls were laundered by the employer.

Accordingly, she could only justify transporting her shirts, trousers and occasional wet weather gear. However, the shirts and trousers could not be considered bulky and the storage facilities at her workplace were adequate and secure. Accordingly, there was no need for the taxpayer to use her car to transport equipment to and from work. The car expenses were therefore not deductible.

As regards the shortfall penalty, the AAT agreed with the Commissioner that the taxpayer had failed to take reasonable care and that there was no justification for remitting the 25% penalty.