Spencer and Commissioner of Taxation (Taxation)

This matter concerned an appeal by Mr Spencer against a decision of the Commissioner of Taxation regarding work-related car expenses. The Administrative Appeals Tribunal was required to determine whether Mr Spencer had provided sufficient evidence to substantiate his claims for work-related car expenses for the financial years ending 30 June 2017 and 30 June 2018.

The primary legal issue before the Tribunal was whether Mr Spencer had satisfied the onus of proof to demonstrate that the kilometres he claimed to have travelled for work purposes were indeed for those purposes, and whether the method used to calculate the deduction was appropriate given the lack of contemporaneous records. Specifically, the Tribunal considered the requirements of section 28-25 of the *Income Tax Assessment Act 1997* (ITAA) regarding the calculation of business kilometres using a reasonable estimate, and the general evidentiary requirements for substantiating deductions.

The Tribunal found that Mr Spencer had not provided sufficient evidence to support his claims for work-related car expenses. While Mr Spencer's role as a water and sewerage infrastructure operator clearly involved significant fieldwork and travel, he failed to maintain contemporaneous records of his business kilometres. His estimates of weekly and daily travel, provided during the audit, lacked any supporting calculation or basis. Consequently, the Tribunal concluded that Mr Spencer had not discharged the onus of proof required to substantiate the full amount of his claimed deductions for business kilometres.

The Tribunal set aside the Commissioner's objection decision and substituted a decision allowing Mr Spencer's objection only in respect of a portion of his claimed business kilometres for each financial year. Specifically, the Tribunal allowed deductions for $1,530.00 for the financial year ending 30 June 2017 and $2,706.00 for the financial year ending 30 June 2018.