When getting to and from work these expenses are incurred directly in order to earn income which is usually the criteria for any other expense.
So it's reasonable that they should be deductible, don't you think?
Public Transport, Car Parking, Petrol, Tolls and Car Wear and Tear Should All Be Tax Deductible
FezMonkey on 21/06/2024 - 15:31
Last edited 21/06/2024 - 15:45 by 1 other user
Last edited 21/06/2024 - 15:45 by 1 other user
Poll Options
- 263Agree
- 30Partially agree/disagree
- 268Disagree
Comments
i need pokemon cards to survive working
therefore pokemon cards are a tax deudction
i wish… i just bought 2 sealed boxes of japanese Ruler of the black flames to keep me going
No problem, just need to produce a copy of your psychiatrist’s report.
It's easier than that I think.
You have breakfast for the day regardless of work.
But you only take the train to work for the purpose of work. Same with driving that particular route. Logbook method would work.This is exactly the sort of thing that made "travel to inspect an investment property" go from being deductible to nondeductible - too many people making a two week trip to Surfers Paradise to "inspect" their unit there and getting a deduction for it.
I'll agree from a purely logical point of view you 'should' be able to get a deduction for something but if it turns out it causes pragmatic problems then the real world weighs in and the big picture answer is you actually 'should not'.
it doesn't take 2 weeks to inspect a property, so it is PROPORTIONATE
@Sinnerator: They weren't claiming the 2 weeks holiday, merely the travel, they just happen to tack on a holiday. Hence ATO decided to just blanket ban.
There are always people abusing the said purposes. But at-least there should be a reasonable limit for what you can claim as a tax deduction.
Think about it, from where I live, the nearest station with parking is 15km / 25 minutes away. That’s 30km / 50 mins or in my case 3L of petrol ($6 @ 200c/l + $10 train ride for the rest of the journey). It is essentially spending $16 + 140 mins of your day for earning the income in which you pay tax on and is completely reasonable to apply for a tax deduction.
@kaleidoscope: Yeah, but as other posters have said, much like eating breakfast or wearing a tie, there's things that are required "for" work that aren't in and of themselves necessary for incurring the income itself. This is one of those.
And like I have said elsewhere, there's no greater purpose to granting this sort of deduction, all that happens is everyone drops an extra grand or two deduction into their tax returns, then the government tax take drops by a huge chunk, and everyone's tax rates gets bumped up to account for this.
@kaleidoscope: "There are always people abusing the said purposes. But at-least there should be a reasonable limit for what you can claim as a tax deduction."
Yeah, every single tradie ever with an ABN.
Tax rorts are the aussie way.
It's not the same thing at all. Travel to and from work can easily be tracked as ATO already does require proof for WFH in the form of Roster schedule. they can easily catch people that misuse something. They're just lazy to do so.
They're just lazy to do so.
They're not lazy. The time and effort spent on these petty thieves isn't worth their time looking into the big fish is all :) With the rise of AI tools and automations, it will make the process a bit more easier.
@MQK: It would be a giant tax sinkhole that serves no purpose. Maybe it would prop up the car market a bit because people would factor in deductions to the next vehicle they bought? (Why buy a $10k shitbox when you can get a $50k car and wash it through your tax return)
Let's remember these people are already travelling anyway to and from work: what advantage is there to anyone if everyone suddenly gets an additional 2 grand tax deduction?).
Tax take ends up lower, tax rates go up. Pointless.
Note that none of my refutation above relies on whether this sort of deduction would be easily trackable or not (because it's irrelevant).
You have breakfast for the day regardless of work.
If you are going to go out and do a days worth of labouring, you would eat far more than if you just planned to sit home and watch TV on the weekend.
But you only take the train to work for the purpose of work
So the people on the trains are only going to work or home? You can't use PT for other trips!?
I take the train to get to work in order to have a liquid 1970's lunch. So based on this I should be able to claim the liquid lunch. Then there is the broken arm from falling down some bumpy stairs that were not there when I started the lunch, so therefore the private health care should be 100% tax deducion as I needed it for the consequences of the liquid lunch and the liver condition I would get later in life from all the liquid lunches.
If only we were back in the 1970's… sorry work up from my tax dream and bugger no deductions here.
Former tax guy here, the line they have drawn is "performing an employee's income-producing activities". Driving to work isn't an income producing activity, you are not paid for it, even though you'd get fired if you didn't do it. Much like why work gear (boots, high vis vest, etc) is deductible but general office wear is not, even though that clothing is entirely used for work. There's no activity it connects directly to. That's basically how the law is written and it would involve legislative change to do so.
There are things that are deductible when clearly not performing income-producing activities, but that's because the pollies have pushed in specific legislation to win votes or boost the economy. Like when things are FBT free for no real reason.
If you can't sleep tonight, here's the ruling - https://www.ato.gov.au/law/view/pdf/pbr/tr2021-001.pdf
Now, whether it should be this way is different, but it would involve legislative change to make it happen. Go write to your local MP, explain how it would boost economic activity if people were back in the office and help the struggling cafes blah blah, etc.
Driving to work isn't an income producing activity, you are not paid for it
And this is the nuance between driving to work vs driving to another place for work/while working and being paid (e.g., another office for a meeting), and why the latter is deductible.
Thanks for the info.
I read the judge's comment on travel:It is, of course, beyond question that unless an employee attends at his place of employment he will not derive assessable income and, in one sense, he makes the journey to his place of employment in order that he may earn his income. But to say that expenditure on fares is a prerequisite to the earning of a taxpayer’s income is not to say that such expenditure is incurred in or in the course of gaining or producing his income … Expenditure of this character is not by any process of reasoning a business expense; indeed it possesses no attribute whatever capable of giving it the colour of a business expense. Nor can it be said to be incurred in gaining or producing a taxpayer’s assessable income or incurred in carrying on a business for the purpose of gaining or producing his income; at the most, it may be said to be a necessary consequence of living in one place and working in another.
Not sure I really follow the logic. He acknowledges it as a necessity to be able to earn the income but then says it shouldn't be considered an expense.
@FezMonkey: Being necessary to earn income is not what makes something tax deductible, it's being necessary to do the work that earns you income that makes something tax deductible.
Do you get paid while driving to work or does your time at work start the second you walk out the door? If you are then I'm jealous and you could argue it's deductible (although it still would likely be a stretch). But the vast majority of people, getting to work is necessary but we're not actually paid to do it.
Whether we should all get paid while we travel to work is another question. It'd never happen because it's too difficult to measure and track, but if it was the norm then the travel itself would probably become tax deductible. It'd have benefits too like supporting those that live further out, but it'd also mean employers would preference inner city employees.
@freefall101: Ah okay that's a bit clearer for me, thanks.
I also thought about travel being counted as work time but agree it would just lead to massive discrimination, unfortunately.
Maybe just public transport to incentivise its use. It would be easy enough to audit too.
Reducing the price would incentivise use too.
@smartazz104: Yes, but the difference is whose budget it comes from, income tax revenue is federal but it gets passed to the states then states have small revenue from ticket sales. So you could do either or or both:
yes and no, one can argue you only need to eat 1/5 of the breakfast/meal if one doesn't need to work or not to eat at all, or only eat one meal a day to surivie but 3 meals to do a quality job.
I think anything that you wouldn't normally be doing. So you'd still be eating right? So that shouldn't be deductible.
But your point on it being deductible if you're self employed; well, why? Why is it ok for one class of worker to do it and not another?
That to me points to it should be deductible.
I wouldn't be buying lunch if I didn't go to the office.
Actually I lie, I don't eat lunch. Save lots more money.
And the lunch I need to continue into the afternoon. And what about the drinks I need at the bar, so I can wind down.
And the pills you need to sleep because you can't switch off from work.
do you know a guy?
I suggest OP argues the point with the TAX OFFICE
Not with us.Get back to us when you have a result.
OTHERWISE THIS POST WASTE OF TIME
Nothing will change as a result
It's called a discussion, ever heard of them? You seem to participate in quite a few of them here, so it seems odd that this is the one you take exception to.
you would eat breakfast regardless of whether you were employed (you need to eat).
you wouldn't drive an hour in traffic each day as an unemployed person unless you had to.How about no deductions but a reduced tax rate.
Hong Kong has 15 percent for up to 640,000usd equivalent at the time of writing for example, then 16 percent for above that.
Or Singapore 80,000-120,000 is only charged at 11.5 percent and 120001 to 160,000 is only charged at 15 percent which is half our rates.
What about the breakfast you need to eat in order to get energy to work for the day
Breakfast is required regardless. Traveling to work would make no sense if you weren't going there to work.
breakfast? you were going to eat breakfast already, no?
if it wasnt for work, then you wouldnt need to travel.
Pretty insensitive take. Surely you can understand that not everybody can afford (nor is there enough supply) to live in an inner suburb close to the CBD.
I'm the OP. I posted the original argument.
@sumyungguy: The context is that tax deductions are generally applied to activities incurred in order to earn an income. My argument is that it is a necessity to get to work, so that should be one of those deductions.
The suggestions being made that we all "can walk" are silly as obviously that is not possible for most.
@FezMonkey: The problem is lower income earners are only able to cash flow limited expenses incurred getting to and from work, compared with the top earners who will figure out how to deduct five figures annually. It's a regressive notion because the rich will just get even richer. Those personal helicopters don't come cheap. ATO is trying to make the income tax system simpler by making self-lodgement more accessible and allowing less deductions which reduces compliance costs.
@sumyungguy: you make a good point here. although I stick with OP on the argument that it should be a claimable amount (esp in Sydney, and I'm sure other big cities in Aus) given many of us (even on reasonably generous incomes) can only afford to live approx 20-30km (~1hr+ away) from our place of work.
I think you should be allowed to claim, but it should be treated with a standard default rate (like the WFH claim). I.e. if you work from the office, you can claim $10 (with maybe higher limits for Capital cities/if your workplace is located in the CBD) per day in travel expenses. That way there is some tangible benefit (up to $2500 in taxable income deductions) for those who commute whilst preventing manipulation.
@FezMonkey: Don't forget getting a university degree is often a necessity to get a specific job, and of course finishing school with a good enough mark to get into that university degree is a requirement as well, and so on.
Pragmatically there's no advantage to granting this sort of a blanket deduction anyway because the tax take ends up being too low and they just pump up the tax rate to cover the shortfall
@FezMonkey: This white paper from 2021 is worth a read for next time anyone is spitballing this at the pub. I learned about horizontal inequity and how USA, Japan, France, Germany, Belgium, Spain, Poland, Korea, Sweden already have a standard deduction. The authors propose $3,000 for Australia
Why should a tradie that never goes offroad for work be able to choose to buy a Ford Raptor for $100k rather than a 2wd Hilux Workmate for $30k and claim it on tax? Why does a business get to claim a > 200k AMG when a $50k Camry does the same job?
We can put some limits in place or standard calculations like cents per km.
Anybody is free to start their own business and make these claims if they allowable.
Just because they can, doesn’t mean they should.
It’s a tax rort. Those who have small businesses such as trades are fully aware of it and take advantage of it.
Maybe the ATO should look into removing these rorts to get better value for taxpayers.
@jv: Actually, using business assets for personal use and claiming the personal use as a tax deduction is illegal & dishonest.
Source: https://www.ato.gov.au/businesses-and-organisations/corporat…
Like buying a suit for 1500$ vs 300$
There is luxury vs requirement! The old want vs need debate
The freedom to do so doesn't mean it's an economically sensible choice for everyone. The freedom to make those unwarranted tax deductions doesn't mean it can be morally justified either.
Because
If they buy things that's beyond the requirement of their job then that's a silly business decision. Why would you spend 100k on raptor when the 30k Hilux does the same.job? Even if it's tax deductible it's a poor business decision.
If they are using it for private purposes and claiming deduction then it should be apportioned. If not then that's tax fraud, nothing to do with deductibility
Even if it's tax deductible it's a poor business decision.
This is a big contributing factor to business failure = unnecessary expense
Why would you spend 100k on raptor when the 30k Hilux does the same.job?
Because they need to look like big lads to their mates.
It's ridiculous that a tradie turns up in a 6 figure Raptor and quotes $2k to do 20 minutes of work. Why should I be subsidizing your vehicle choice.
Common you think they are actaully apportioning private vs business use. I always found it odd that working in IT I could not claim 100% for my Laptop or PC yet my plumber mate could no questions asked, infact he could claim any reasonable tool as a straight up write off and not even depreciate it.
There is a limit on depreciating passenger vehicles of about $70k. Anything above that there’s little tax benefit and likely piles of FBT to pay (if done correctly).
And remember the idiot tradies spending $100k because it’s ax deductible are still miles out of pocket for it.
People who don't earn much money believe there's some buying a 200k car deduction myth.
Agree with this 100%. There should be limits on what is claimed for business use. You need a ute? cool, average ute price is $50k so that's the cap, anything above this is your choice. Exceptions for specialist scenarios only.
No one chooses to live far from work, the problem is there are too many people in the way between home and work.
Ah so there's no housing affordability issue, just poor lifestyle choices. Makes sense, cheers.
Nobody tells you where to live, it’s your own choice.
People choose to live in a place that's a balance between affordability and work availability. Those are major factors that typically are greater than "I'll live wherever I want to".
@sumyungguy: No, but you're ignoring the fact that external factors effectively tell people where they can't live.
"Nobody tells you where to live, it’s your own choice."
Tell me you were born into money without telling me.
@coffeeinmyveins: Love spitballing with communist/socialist idealogues who resent that some people are more afflent than others and hold the state accountable for freeing the underclass from the scourge of capitalism.
Maybe you can drive for Uber part time or something, then suddenly the expenses becomes partly deductible?
I agree but there has to be a cap.
I also think that Novated Leases, particularly EVs is a rort on tax payers.
Double rort.
A lot of the petrol tax goes towards road wear. Having an EV basically means you are doing paying for the infrastructure upkeep that you use.
But this is a concern with a lot of stuff. Less dense suburbs usually get subsidised by more dense suburbs for road infrastructure.
Road wear from passenger vehicles is tiny compared to trucks. If we paid proportional to road wear, if a car paid $100 a year then a truck would pay $1,000,000 a year. Don't use "road wear" as an argument for how much different passenger vehicles should pay.
Either way, fuel excise duty (your "petrol tax") doesn't pay directly for road wear or anything transport related. It just goes into general revenue, exactly like your income tax (and the income tax of everyone who never drives). Every federal expense is paid for from that. Note, that's federal. Those funds don't pay for your local roads.
you dont have to drive you can walk.
You can also take the train. Which would be tax deductible according to me
🤣🤣🤣
And deduct shoe wear, brilliant.
You can also walk to work. No body made you take PT or drive to work.
Yes you can walk if you want. Be my guest. But if you don't, it's tax deductible (in my proposal).
exactly. also you have a choice on where you live. for things you have no choice, i.e when travelling from workplace to workplace, that is deductible.
Working from home some days per week is also a choice, but you get deductions for that.
watever is deductible working from home for you is also deductible expense for working at the office. except its your employer that pays for those expenses and they claim deductions on that in their tax return.
the real question is why dont you ask your employer to pay for your train/petrol etc?
All good, walking to walk would make shoes a deductible expense.
no one said you have to wear shoes to walk
Yes, but in the spirit of this discussion you'd claim anyway based on the number of steps taken.
@sumyungguy: Don’t forget to claim the $1389 garmin watch you bought in order to accurately count your steps.
Show of hands if you live walking distance from work…
My work college literally lived across the street from our old work place… we had to move.. now he is a whole 3 min walk from work.. poor bugger
There are several things that the govt. should make tax deductible to benefit communities
Taking PT
Volunteering
Donating blood
Buying local/aussie madeIf they deducted parking/petrol/tolls etc then they'd just raise their taxes in another way. It's not a deduction if you end up paying for it somewhere else.
how much does it cost to donate blood?
Time - same as volunteering and PT. But it benefits others.
So what would be the value of the deduction for donating blood or volunteering?
@Nugs: OK, so like a notional reduction in your taxable income, rather than deducting an actual expense. Donating blood might be reasonably straightforward, but volunteering would require a fair bit of regulation/documentation to stop people taking advantage. Pretty likely to have significant unintended consequences I would think.
I think making PT tax deductible is an excellent idea, better than what some countries do in that they offer free PT.
Where do you draw the line.
What about the breakfast you need to eat in order to get energy to work for the day? What about the wear and tear on your eyes resulting in needing glasses because you sit at a computer?
those things generally are tax deductible if you're self employed right. Just not as a salary worker.