Rented Storage Unit
Driving To And From Storage Locker Containing Tools
We have a small home based landscaping company. All our work is done in a city that is 45 km away. We rent a storage unit in that city where all the small tools & equipment are kept - rakes, shovels, ramps, tarps, hand mowers, garbage bags, weed eaters,etc.
All the large equipment - trucks, riding mowers, Rototiller, landscape trailers, containers of fuel (which are not allowed to be kept in the storage unit), etc is kept at the home property. Every day some of these have to be taken into the city where our work is done. One of our employees lives in our community and he uses a work vehicle which he takes in each morning and brings back to our property each day.
Is the trip from the home office to the storage unit a business expense?
Thank you.
Expenses are generally deductible if they are:
1. ordinary and necessary for your business/industry;
2. current (as in not a capital expense);
3. directly related to your business earning income and not personal in nature;
4. reasonable in amount for the circumstance;
5. you have original source documentation to support the expense (which in this example would be the storage locker rent and the auto log of the trips to and from the storage locker).
It is my understanding that acceptable to deduct a business trip from your home (if you have a home office and that is your principal place of business) to a temporary work location (i.e. your storage locker in this example).
As it sounds as if your employee is driving a company vehicle that is used 100% for business and parked at your principal place of business when not used for business, I'd be inclined to treat the trip to the storage locker as a deductible business trip.
However, if the employee is using their own vehicle and leaving from their own home to go to the job site, then I'd say the trip was not deductible as trips from an employee's home to the "office" (which in your situation would be the job site) are never deductible.
This is my opinion. You may want to use CRA's enquiries feature found under My Business Account for their opinion which is provided in writing.