Bell and Commissioner of Taxation (Taxation)
[2020] AATA 3194
•28 August 2020
Bell and Commissioner of Taxation (Taxation) [2020] AATA 3194 (28 August 2020)
Division:TAXATION AND COMMERCIAL DIVISION
File Number: 2017/0940
Re:Jason Bell
APPLICANT
AndCommissioner of Taxation
RESPONDENT
DECISION
Tribunal:F D O'Loughlin QC, Deputy President
Date:28 August 2020
Place:Melbourne
The Tribunal sets aside the decision under review, and in lieu thereof substitute a decision allowing further deductions to the Applicant for the first aid course of $363, for the home internet of $395 and for the telephone of $620 and otherwise to affirm the decision under review.
...................[sgd].....................................................
F D O'Loughlin QC, Deputy President
Catchwords
TAXATION – tax deductions – motor vehicle expenses (heavy/bulky goods basis for determining employment related use, allowance basis for determining employment related use, inadequate record keeping) - home internet and utilities expenses and mobile telephone expenses - first aid course cost – decision set aside and allowed in part.
Legislation
Income Tax Assessment Act 1997 (Cth)
Cases
Commissioner of Taxation v Vogt [1975] 1 NSWLR 194
REASONS FOR DECISION
F D O'Loughlin QC, Deputy President
28 August 2020
For the 2016 Year,[1] the Applicant was a construction worker with responsibilities as a construction site Fire Warden, First Aid Warden, OH&S supervisor and the Site Foreman’s assistant, and disputes deductibility of the amounts shown in Table 1 below. The Applicant contends that the contested amounts are properly deductible by operation of s 8-1 of the 1997 Assessment Act.[2]
[1] The financial year that ended on 30 June 2016.
[2] The Income Tax Assessment Act 1997 (Cth).
Table 1
Expenditure category
Gross amount of the expense
Employment related % asserted
Claimed amount
Amount allowed or accepted
Ongoing dispute
Work related car expenses
$31,082.16
80%
$24,865.73
$3,300.00
$21,565.73
Phone
$1,239.41
77%
$960.00
nil
$960.00
Home office utilities expenses
$4,474.00
18%
$805.00
$324.00
$481.00
Home internet
1320
30%
$395.00
nil
$395.00
First aid course
$363.00
100%
$363.00
nil
$363.00
The Applicant advances alternative bases for:
· home office utilities expenses at a rate of $0.45/hour for three hours a night, five days a week, for 48 weeks of the year: $324 (an amount the Commissioner accepts); and
· the car expenses deduction on the basis that he is entitled to a deduction to the extent of the allowance he received; namely $15,221 (an amount the Commissioner does not accept).
The internet cost was $130 per month less a credit for $20: $110. Adopting a 30 day month, the Applicant translates the monthly charge to $3.67 per day and the claim was $1.10 per day, - approximately 30% of the charges.
The $3,300 work related car expenses deduction has already been allowed by the Commissioner in an amended assessment.
The Commissioner accepts that $324 is allowable as a deduction for home office utilities expenses but that deduction has not yet been reflected in an amended assessment.
Facts
Throughout the 2016 Year, the Applicant lived in western regional Victoria more than 100 km from Melbourne, was married, and had a wife and two young children who all lived with him. The Applicant’s wife worked full time and his children attended school. His children were usually in bed by 8:00pm at the latest and his wife was an evening television watcher.
Employment circumstances
For the 2016 Year, the Applicant was a construction worker who predominantly worked at one construction site in an eastern suburb of Melbourne and had responsibilities as set out in general terms above. More particularly he:
(a)reported daily to the Site Foreman, who allocated his work tasks;
(b)owned and maintained a utility motor vehicle that had a load carrying capacity of one tonne or more;
(c)was instructed by the Site Foreman to use his vehicle to collect and transport materials, equipment, diesel fuel and tools to and from sites;
(d)was paid an allowance. The allowance was a set daily rate and was not responsive to, and did not vary with, the amount of travel undertaken. The allowance was approximately one hour’s pay per day, was paid under an Enterprise Bargaining Agreement, and, according to the Applicant, everyone in the building industry received it. The total paid for the 2016 Year was $15,221;
(e)was required to collect stationery and materials from the employer’s head office in Port Melbourne on a regular basis;
(f)while travelling between his home the sites operated by his employer, collected and/or delivered materials, equipment, tools, diesel fuel for site equipment, and other supplies and stationery;
(g)was the construction site Fire Warden, First Aid Officer and OH&S Officer;
(h)was required to have a mobile phone on site and to be on call to enable inductions on site, safety walks and tool box meetings, and is not reimbursed for his telephone costs;
(i)was required to prepare daily reports on machinery safety and other matters and update the ACONEX online system for the sites at which he worked and this would take approximately two to three hours nightly using a home study and home utility and internet facilities; and
(j)was required to attend compulsory First Aid and OH&S courses the cost of which was met by the company retaining an amount sufficient to pay the course provider from the Applicant’s allowance shown as his income on his PAYG statement.
Motor vehicle and travel
The total amount of his motor vehicle expenses in the relevant year was $31,082.16.
The Applicant contends that he was required to use his vehicle:
(a)to transport heavy/bulky goods (tools) between his home and his workplace;
(b)to collect supplies and equipment from hardware stores while travelling between his workplace and his home;
(c)to purchase diesel fuel, which the Applicant maintains he did while travelling between his workplace and his home;
(d)to collect or return heavy plant from plant hire businesses which at times he did while travelling between his workplace and his home; and
(e)to collect supplies from his employer’s head office in Port Melbourne which he predominantly did while travelling between his workplace and his home; and
(f)albeit it not a predominant use, to travel between construction sites and to take workers to have medical attention.
The Applicant did not maintain a log book in the manner required for the log book to be a reliable record of his employment related travel. In his own words the Applicant’s diary was a shemozzle. More accurately it was a retrospective reconstruction based on a combination of the Applicant’s memory of where he was on particular days, his knowledge of distances between those locations and odometer readings recorded on his vehicle at various dates, and constitutes estimates or backward looking projections of what would have been recorded. In the hearing, the diary was shown to contain errors. It is manifestly a reconstruction and not a record maintained in a way that could reliably be used to show employment related use of a vehicle.
The Applicant regularly was required to attend hardware suppliers collect materials and consumables for the construction site and tools for construction site workers, plant hire suppliers to collect and return hired plant and equipment, and fuel stations to purchase diesel fuel for construction site equipment. Frequently these activities occurred daily. To purchase diesel fuel the Applicant used the Site Foreman’s fuel card which the Applicant contends he had possession of overnight so he could make purchases on route either to or from his home. The Site Foreman contradicts this assertion as noted below. Other travelling requirements entailed driving to the employer’s head office in Port Melbourne to collect stationery and other supplies and from time to time to transport fellow employees to procure medical attention.
The frequency of the Applicant’s requirement to travel for these purposes varied throughout the year. Some weeks it might have been once or twice a week and other weeks it could have been two or three times per day.
From the Applicant’s perspective, he saw it as a requirement to attend to deliveries and collections while travelling between his home and workplace to achieve operational efficiency at the construction site. Clearly it would have been more efficient to undertake deliveries and collections where possible while travelling between the construction site and the Applicant’s home because, self-evidently, it would have saved the time involved in a return trip to the construction site during normal working hours.
The Site Foreman’s evidence, however, was that it was not a requirement of the Applicant’s employment that these matters be attended to whilst travelling between his workplace and his home. Rather, when there was not an urgent requirement for the item to be collected or delivered during the day, it was something that was simply arranged so as to be convenient for both the employer and the Applicant to attend to these requirements when the Applicant was travelling between his home and the construction site.
In this sense the requirement as perceived by the Applicant is somewhat misconceived and misinformed, albeit it is likely that the Applicant’s view is genuinely held.
The Applicant perceived a need to carry tools of trade with him when travelling between his home and his workplace for a combination of perceived security needs and a belief that he would be responsible for making good any losses by theft. These perceptions are contrary to two aspects of the evidence led on the Applicant’s behalf. First, apart from a short period when the Applicant’s employer did not have security facilities at the construction site, there was no security need to carry tools of trade to and from home each day. Security facilities were available and effective at the construction site for the significant majority of the 2016 Year and there was no other need for the tools of trade to be carried between the construction site in the Applicant’s home so as to be available for use at different locations. Second, the Applicant’s perception concerning responsibility for replacement of tools of trade owned by his employer was misinformed. The Site Foreman’s evidence was that the employer would meet the cost of replacing stolen tools of trade unless the employee had been derelict in his or her duty, and a theft from a secured facility would not be regarded as dereliction in duty.
To the extent the Applicant relies on a contended need to transport diesel fuel, and diesel fuel containers, to and from his home is also contrary to the evidence led on his behalf. The Site Foreman’s evidence was that he would not be allowed to provide his fuel card to another employee for retention overnight and if that in fact happened it would have been a mistake. The necessary conclusion that follows is that the diesel purchases must have predominantly been made during the working day.
The tools carried in the Applicant’s vehicle, some of which the Applicant owned and some of which were signed out to the Applicant by his employer, and some of the other goods the Applicant was required to transport qualify physically as bulky or heavy goods within the concept as explained in the Vogt[3] decision. What remains to be demonstrated is, in the circumstances outlined above, whether those items needed to be transported to and from the Applicant’s home such that that travel became employment related travel. Other goods were not of that description. What remains is whether it was an incident of his employment that he collect those items while travelling to and from his home rendering the totality of travel, including the travel to and from his home, as employment related travel.
[3] Commissioner of Taxation v Vogt [1975] 1 NSWLR 194, Waddell J.
The Applicant’s home-based activities – utilities and internet expenses
The Applicant was required to enter construction site operational data into online databases on a daily basis, and used a home study facility and internet connection facilities at his home to do that.
The internet service was part of a bundled telephone and internet service where telephone call charges on a landline were not separately levied on the amount paid for these bundled services which was $110 per month. The Applicant calculates a proportion of (approximately) 30 per cent of this charge is referable to his internet use. That proportion is based on a calculation that recognises that he used the internet for up to three hours per night five nights a week for 48 weeks of the year and an allowance for other family members’ internet use and for the bundled telephone use. The Site Foreman gave evidence that he had experience in entering the data in the computer systems that was entered by the Applicant and that it was a daily process and that it was time-consuming. The Applicant’s wife worked full time, was not an internet user in the evenings, rather she was a television watcher and the Applicant had two young children who attended school and were children who went to bed early each night leaving the Applicant the predominant use of internet facilities on a daily basis for his work related activities.
The Applicant maintained a portion of his home as a study workspace area of approximately 3.6 meters square in an open area of his residence and on the side of what might be described as something of the thoroughfare connecting two frequently used parts of his residence, the lounge room and meals/kitchen area. The Applicant determined an 18 per cent proportion of utility costs referable to what he claims was the employment-related consumption of the facilities secured by those utility charges by dividing the house into high use and low use zones from a utilities perspective, with bedrooms being low use zones, and then on an area basis, and arrived at the asserted 18 per cent of utility charges referable to his employment-related activities.
Mobile phone
The Applicant was required to have and use a mobile phone, and provided evidence of an annotated telephone account which he claimed demonstrated 77 per cent employment related telephone usage. The Commissioner’s examination of that analysis revealed that the actual telephone calls identified as work-related calls was only 59 per cent and that there were errors in those that have been identified as work-related calls been called to the Applicant’s wife.
Recognising an error factor it can be accepted that the Applicant’s telephone use for employment-related purposes of approximately 50 per cent is not an unreasonable proportion.
First aid course
The Applicant undertook first-aid refresher courses during the year. The Applicant was paid an allowance to meet the cost of those courses which appeared on his PAYG summary but the cash for this component of the allowance was not paid to him directly, rather it was withheld and paid to the supplier of that course directly by his employer. The Commissioner asserts there is no documentary evidence of this arrangement. It might be the case that there is no document which bears out the contended facts, but the evidence of the Site Foreman is quite clearly to this effect and corroborates the personal testimony given by the Applicant. It will be recalled that the Site Foreman contradicted other aspects of the Applicant’s evidence and he was clearly not partial and is to be believed. It can be accepted that that arrangement for meeting the cost of the first aid course was implemented.
Consideration
Motor vehicle expenses
The Applicant's vehicle is not a car,[4] with the result that the Division 28[5] rules do not apply. There is no dispute as to these matters, or that the $31,082.16 is the amount that is to be divided if an appropriate employment related proportion of total travel can be established.
[4]Within the meaning of that term as defined in 1997 Assessment Act, s 995-1.
[5]1997 Assessment Act, Division 28.
To be deductible, the Applicant's motor vehicle expenses must meet the tests in s 8-1 of the 1997 Assessment Act.
The two issues that remain in dispute are:
(a)whether the Applicant was required to carry bulky tools and/or equipment to and from work, such that his home to work and return travel is sufficiently employment related for its cost to be a deductible expense; and
(b)whether the Applicant has established a proportion of employment related use of his vehicle which would give rise to a deduction greater than the $3,300 already allowed.[6]
[6]$3,300 has been allowed as a deduction and is an amount equivalent to the maximum 5,000km allowable under the 'cents per km' method.
Deduction entitlements are not advanced on the basis that the Applicant is an itinerant worker. Nor could they be. The Applicant had a principal location where he worked throughout the 2016 Year and driving to other places to collect materials or tools or hire equipment or stationery or fuel or for other incidental matters were trips to those locations that were an incidental part of his working at or substantially at a single construction site.
The Applicant advances his entitlement to a deduction based on a contended need to carry bulky goods between his home and his workplace on a daily basis.
The Applicant’s circumstances are not the same as those of the taxpayer in Vogt where a professional musician’s expenditure was characterised as expenditure incurred for the carriage of his equipment rather than for transport between his places of residence and work. Waddell J considered the requisite approach and tests for determining the essential character expenditure incurred in travelling with bulky goods as follows:
[T]he first step in determining whether the expenditure in the present case is deductible under s. 51 (1) is to state what are the relevant aspects of the operations carried on by the taxpayer for the production of his income. These are that he earned his income by performing, at several places, on musical instruments and associated equipment upon terms that he brought the instruments and equipment to the place of performance; the instruments and equipment were of substantial value; they were of a bulk which meant they could be transported conveniently only by the use of a motor vehicle; the taxpayer kept the instruments and equipment at his residence for justifiable reasons of convenience and for the purpose of practising on them. This step must first be taken in order to take the next step which is to determine what was the essential character of the expenditure itself. Three matters are, I think, relevant to this character. Firstly, the expenditure was incurred as part of the operations by which the taxpayer earned his income. Secondly, it was essential to the carrying on of those operations: there was no other practicable way of getting his instruments to the places where he was to perform. Thirdly, in a practical sense, the expenditure should be attributed to the carriage of the taxpayer's instruments rather than to his travel to the place of performance. The mode of his travel was simply a consequence of the means which he employed to get his instruments to the place of performance, that is by carrying them in the motor vehicle which he drove. In the light of these matters it is my opinion that the essential character of the expenditure was such that it should be regarded as having been “incurred in gaining or producing the assessable income”. In the course of argument reference was made to the analogy of a violinist who kept his violin at home and took it with him to various places where he played. It was submitted for the Commissioner that clearly in such a case the expense of the violinist travelling from his residence to the place of performance could not become deductible, because he took with him his violin which he kept at home for safe keeping and for the purpose of practising. This is, I think, clearly correct. The reason why such expenditure would not be deductible is that it could not be said to arise from, nor could it be attributed to, the necessity of getting the violin to the place of performance. Another example, not mentioned in argument, which illustrates what I consider to be matters relevant to the proper categorization of the expenditure, is that of a concert pianist who insists upon playing on his own piano. If he were to keep this at a studio where he practised, the expense of carrying it from the studio to the place where he was to perform should clearly be regarded as a business expense and deductible under s. 51 (1). Would it be any the less deductible if he were to keep it at home and travel with it in the same vehicle to the place of performance? I think not. There may well be cases where, as a matter of fact, the size and bulk of an instrument, or the reasons for keeping it at home, may make it difficult to determine whether expenditure incurred in circumstances similar to the present is deductible. However, I do not think that such hypothetical difficulty indicates that the approach which I have taken is wrong.
Contrary to the Applicant’s contentions the evidence does not support such a conclusion.
The evidence supports a conclusion that the travel between workplace and home, or between home and the immediate point of collection or delivery of materials, goods, fuel and/or equipment was private transportation to and from work albeit it was a more efficient manner of carrying out the Applicant’s work responsibilities at the site where he worked because that process or procedure required less time away from the construction site. The Site Foreman’s evidence confirms the Applicant’s evidence of the need to collect materials, stationery, supplies and hire equipment and fuel for diesel engines but does not confirm that it was a necessary aspect of the Applicant’s duties that things collected or purchased be transported between the place of collection and the Applicant’s home. The Site Foreman was quite clear that the Applicant’s travel arrangements were more a personal convenience factor. A personal convenience factor such as this can be expected in a situation where an employee lives a lengthy distance from a workplace, of which the Applicant’s circumstances are an example – living in western regional Victoria and working in the eastern suburbs of Melbourne.
There was no need for the vast majority of the 2016 Year to carry bulky tools between the construction site and the Applicant’s home because adequate arrangements were in place to store those tools securely at the construction site and once those arrangements were in place there were no difficulties experienced in relation to the tools kept there.
In relation to purchases of fuel and carriage of diesel fuel used at the construction site, the evidence led from the Site Foreman contradicts the Applicant’s evidence and does not suggest that the Applicant had a need to carry diesel fuel containers between his workplace and his home. The Site Foreman’s evidence was particularly firm in that he would not, and would not be permitted to, allow the Applicant to retain a fuel card used to pay for the fuel purchased for the construction site overnight. This is a personal matter and a personal responsibility matter that the Site Foreman could be expected to remember with reasonable clarity. To the extent that the Applicant contends otherwise the conclusion is that he is mistaken, or, more likely, has formed a belief based on isolated occurrences.
Based on the evidence led on his behalf, the proper characterisation of the transportation of bulky goods including the diesel fuel in the Applicant’s circumstances, is that it was for his personal convenience or preference as opposed to an operational need of his employment circumstances, notwithstanding the Applicant probably genuinely holds the view that these arrangements were solely related to efficient operations at the construction site.
It is undoubtedly the case that the travel between the Applicant’s construction site and other work related places, be they hardware stores or the Applicant’s employer’s head office in Port Melbourne, or hospitals when the Applicant drove injured workers for medical treatment, or equipment hire places, or fuel suppliers, is employment related travel. However, the Applicant has not established the proportion of the total travel in his vehicle for the year that relates to these activities.
Particular mention needs to be made of the travel between the Applicant’s home and non-construction site locations such as hardware materials and tool supply outlets, equipment hire outlets, or fuel suppliers, or the Applicant’s employer’s head office. A person whose duties require collection of supplies and materials consumed at a workplace location does not transform the travel between home and the place of collection of those items consumed in a workplace location simply by collecting those items on the way to work. Similarly, such a person does not transform travel from a place of collection of a workplace consumable to home and the travel from home to work the following day merely by collecting a consumable supply on the way home, taking that consumable supply home and taking the supply from home to the workplace location the following day. The fundamental nature of the travel from the point of collection to the employee’s home, or from the employee’s home to the place of collection of the workplace consumable is travel between home and workplace. Absent the bulky goods exception applying, the character of the travel between place of collection and place of home and vice versa is not altered. If it were, a person who collected food consumables at a location close to home and then travelled an extensive distance to the workplace could transform the nature of the travel simply by choosing a place of collection for a consumable close to a home as opposed to a location close to the workplace.
The alternative proposition, a deduction based on the allowance paid, cannot be accepted in this case. Receipt of an allowance does not universally compel a conclusion that deduction entitlements arise to the extent of, or in some case for any amount of, the allowance received. Even if receipt of an allowance can suggest this conclusion in some cases, this is not a case where it could. Here, where the allowance is an industry wide payment of a flat amount unconnected with employment related activities, and could be paid to someone who is driven to work by a friend or colleague or family member and not incur any loss or outgoing at all, there is no suggestion that the allowance is a genuine forecast of likely deductible expenditure. For an allowance such as this one, it remains necessary to demonstrate that employment related expenditure has been incurred and the amount of that expenditure or that expenditure of at least the amount of the allowance has been incurred.
The Applicant’s diary for the 2016 Year cannot be accepted as a record of employment related use of his vehicle. It is quite apparent that it was not maintained as a travel log or travel diary should be maintained, namely as a contemporaneous record of travel undertaken. Further, it cannot be accepted as a record of employment related travel when it records travel between home and his workplace or the place of collection of rental equipment and/or supplies etc. as employment related travel. It is also inaccurate containing evident errors. Even focusing on what is unquestionably employment related travel, namely trips between his workplace and locations for collection or delivery of work-related goods and supplies, the diary is not a sufficiently accurate record of the employment related kilometres travelled.
For the 2017 Year,[7] a better diary was maintained, However, the Applicant’s working arrangements in the 2017 Year were sufficiently different in terms of locations at which he worked such that the 2017 Year diary is an unsafe guide as to employment related proportionate vehicle use for the 2016 Year.
[7] The financial year that ended on 30 June 2017.
The Commissioner does accept that the vehicle was used for employment related purposes, as clearly it was. The evidence led does not support a particular proportion of employment related use. It can be accepted that given the nature of the Applicant’s work related activities that the cents per kilometre basis of determining a deduction up to 5,000 kilometres would be allowable to the Applicant as a minimum and the Commissioner does not oppose that allowance, and has already allowed it. Not further entitlement has been established.
Home office utilities expenses
The quantum of expenditure incurred for utilities at the Applicant’s home is not in dispute. The amount is $4,474.
What is in dispute is the proportion that is properly deductible.
The Applicant’s approach to apportionment and the features of his home are as set out above. The particular area of the house is in a common area and in a sense part of an access way between two other commonly used areas in the household. In those circumstances it is difficult to see how 18 per cent of the total utility costs for the year is properly referable to income producing activities. The alternative basis upon which the Applicant contends for a deduction entitlement is at a rate per hour based on an estimate of three hours per night, five days per week for 48 weeks of the year using the Commissioner’s rate of 45¢ per hour.
In circumstances where the 18 per cent of total costs approach to apportionment has not been established as appropriate, and where it is accepted that three hours per night for home based activities during which entries are made to a database system through an internet connection the hourly rate is an appropriate basis for a deduction and the Commissioner does not resist that.
It should be noted that, contrary to the Commissioner’s submissions, the Applicant did advance both the 18 per cent of total cost and hourly rate bases for determining an applicable deduction entitlement and did not abandon the former approach, rather, submitted the latter approach in the alternative.
Home internet costs - $395
The $395 claim for internet usage is based on an amount of $1.10 per day. The $1.10 per day is approximately 30 per cent of the amount paid for a bundled internet and home telephone connection.
The Commissioner contends that no reasonable basis has been shown to support the Applicant’s claim for $1.10 per day for internet usage. To the contrary, the approach does have a rationale and that rationale is reasonable. The monthly cost of $110 was for a bundled internet and telephone service and the Applicant contends that his young children are not extensive users of the internet being attendees at school and children who went to bed relatively early each night and that his wife is not an extensive internet user being a television watcher at night and he personally uses the internet for up to three hours per night. It is noteworthy here that the Commissioner accepts the Applicant’s thee hours per night home-based employment related activities for the purposes of allowing a deduction claim for utilities costs. The nature of the activities undertaken in those three hours, entering data in online database systems requiring an internet connection, has also been accepted Acceptance of the three hours per night home-based employment activities necessarily requires acceptance of use of internet facilities and therefore a proportion of the cost of those facilities is a genuine deduction entitlement. The 30% of the total cost is quite a rational basis for determining an appropriate proportion of the bundled internet and telephone service costs, and, in the family setting described, also seems quite a reasonable one.
It is appropriate therefore to allow the deduction of $395 for home internet usage.
Telephone
The Applicant’s claim for telephone expenses is 77 per cent of a total charge of $1,239.41. The $1,239.41 is not disputed as the aggregate to be divided. What is in dispute is the appropriate proportion. The employment related calls identified by the Applicant does not in fact show a 77 per cent employment related usage of the telephone. It shows a 59 per cent use, and included in the calls identified were a number of calls which were not employment related.
The nature of the Applicant’s duties compels a conclusion that use of a mobile telephone is an incidental part of his employment activities. Accordingly some proportion of the telephone bill in aggregate is properly deductible. Allowing for some error in the identification of employment related calls in the evidence led by the Applicant, and taking on the Commissioner’s calculation of 59 per cent a deduction of 50 per cent of the mobile telephone bill is appropriate in the circumstances. Accordingly a deduction entitlement of $620 ought be allowed.
First aid course
The Commissioner contends there is no documentary evidence to support that the Applicant paid the $363 for the first aid course.
It is undoubtedly the case that attendances at first aid refresher courses by the Applicant are incidental parts of his employment responsibilities and accordingly if incurred the cost of attendance is properly deductible.
The Applicant’s evidence was that whilst he was recorded as having received an allowance for the cost of the first aid course that component of his allowance was not paid to him directly, rather $363 was used to pay for the cost of the first aid course. In effect the Applicant has met the cost and incurred the loss or outgoing associated with the first aid course by constructive receipt of his allowance and use thereof to pay for the course. In those circumstances the allowance is paid to the Applicant and the Applicant has paid for the course. The Applicant led evidence in support of this contention from his Site Foreman who confirmed that the allowance was applied in this manner. That is sufficient evidence to support the conclusion that the amount is properly deductible.
Decision
For the foregoing reasons the decision of the Tribunal is to set aside the decision under review, and in lieu thereof substitute a decision allowing further deductions to the Applicant for the first aid course of $363, for the home internet of $395 and for the telephone of $620 and otherwise to affirm the decision under review.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for the decision herein of F D O'Loughlin QC, Deputy President
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Associate
Dated: 28 August 2020
Date(s) of hearing: 5 & 6 March 2018 Date final submissions received: 5 April 2018 Advocate for the Applicant: Mr Darren Wynen Tax Agents for the Applicant: Peter W. Jess & Associates Pty Ltd Counsel for the Respondent: Ms Fiona Cameron
Key Legal Topics
Areas of Law
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Tax Law
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Statutory Interpretation
Legal Concepts
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Statutory Construction
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