Case V143

PM Roach SM

Administrative Appeals Tribunal

Decision date: 9 September 1988.

P.M. Roach (Senior Member)

The applicant - a civil marriage celebrant - claims deductions in relation to costs incurred in the way of clothing and grooming. I shall first consider that relating to clothing.

2. Clothing is one of the things which most obviously distinguishes man from the lower order of animals. Clothing is worn for a variety of reasons ranging from social concepts of decency and propriety; to the need for protection from the elements. As such, the cost of clothing has traditionally been seen for income tax purposes as being something so personal to the wearer as to be regarded as ``private'' in character for the purposes of sec. 51(1) of the Income Tax Assessment Act 1936 (``the Act''). The applicant accepts that. However, as with many other things, it is recognised that there are exceptions. The applicant contends that the claim presently before me for consideration should be allowed as falling within recognised exceptions. To determine that, it is appropriate to further consider just what clothing is.

3. In addition to the considerations already mentioned, it is to be noted that what clothing is worn is also influenced by a wide range of social considerations, including both the response of the individual to the expectations of others; and the desire of the individual to influence the perception of others by the image of self presented through clothing. As to the former, social convention dictates expectations of dress standards ranging from the very formal to the quite informal. What is considered appropriate for a beach inspector going about his duties is not considered appropriate for the magistrate on the one hand, or for the factory worker on the other. Then, too, the adoption of particular forms of dress worn uniformly may identify the wearer as the performer of a particular social role, be it that of a bus conductor, or a security guard. Further additions to such ``uniforms'' by way of insignia can conveniently identify rank and responsibility within a hierarchical order, as with the uniforms of the soldier and the policeman. Then again, clothing may be worn which, although serving the basic functions of decency and protection, may be predominately determined by other influences, such as with those who serve the community through entertainment: the clown, the thespian and the entertainer.

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4. There is another aspect of clothing which is related to the present issue. It lies in the circumstance that, as between the sexes, in all ordinary circumstances it is the ladies who dress in a greater variety of styles and colours and who have the greater ``need'' to dress differently from day to day and from one situation to another.

5. Against that background it is appropriate to observe that the costs incurred by persons in the course of deriving assessable income by providing clothing for the use of their employees or contractors is deductible whether it be an elaborate wardrobe provided by a film maker for his actors; or a simple uniform provided by a fast-food operator for its staff. Secondly, if the individual bears the expense of providing his own clothing to a standard specified by those engaging him, then if it is judged appropriate to characterise clothing conforming to that specification as constituting a ``uniform'', he too will be entitled to a deduction for the expense incurred. But in that case the uniform must be more precisely defined than ``blue shirt and grey trousers'' (a hospital orderly case (unreported) or the ``white blouse and black skirt'' of the lady barrister (the decision of the House of Lords in
Mallalieu v. Drummond (1983) 2 All E.R. 1095). Thirdly, because of the different dress roles of the sexes, the different standards within, and expectations of, social groups have resulted in some situations whereby the fiscal result is determined according to sex - but, may I say, not by reason of sex in any discriminatory sense. I have in mind situations such as arise in the armed forces when, on formal occasions in officers' messes, male officers are required to attend in full dress uniform - but uniforms none the less - whereas female officers attire themselves formally, but not in uniform. They do not dress uniformly in any sense other than formally because, to date, all attempts to design a ``uniform'' for female officers to wear on such occasions have failed. (An unreported decision.)

6. Then, too, persons engaged in income-earning activities, whether as employees or as persons self-employed, are influenced in greater or lesser degree in their choice of clothing by the expectations of others and the circumstances of their calling. The person engaged in soiling work under dirty conditions is not likely to wear white clothing or clothing made of anything but hard-wearing materials. On the other hand, perhaps for no other reason than convention, male office workers tend to wear suits but the ladies dress in far greater variety.

7. In dealing with clothing claims, the expenses of those wearing clothing having some protective function (the plumber's overalls, and the ski instructor's ski suit) are accepted as allowable, but those of office workers not so. Then there are those people who wear clothing in a way which specially signifies their calling. The mannequin not only models clothes when on parade but normally chooses her clothing, and at all times wears clothing, so as to demonstrate her sensitivity to fashion and her abilities as a mannequin. Again, the entertainer is a person for whom clothing takes on something of the character of his presentation as an entertainer, whether he be wearing Tudor court dress, convict slops or the tailored suit of a successful executive.

8. But for most persons in the community it is possible to say that they dress ``conventionally'' according to the expectations of others and according to the circumstance. A solicitor is likely to wear a suit to his office and, in most areas of Australia, almost certainly to Court. He may only have a suit because he has to go to Court (cf. Case K2,
78 ATC 13). He may have several expensive hand-tailored suits, all similar in style; or he may have many ``off-the-rack'' suits representing as wide a variety of styles as are to be found in the way of suits. But, ordinarily, in no instance will his expenditure be treated as deductible. His clothing has no special function beyond that which is conventional in the circumstances of his calling. Nor does his calling require anything exceptional of him in the matter of clothing.

9. A person may be put to quite unusual expense, as for example, with the executive or cabinet minister who is called on to travel from his base in Australia to foreign parts. In order to most effectively carry out his duties in those foreign parts, he may have to acquire a wardrobe suited to the foreign parts, but one of little or no value to him on his return to Australia. Once again the expenditure so incurred is not considered to be incurred in such circumstances as to qualify the individual

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for tax deductions - whether as to either the number or variety of garments.

10. The claim of the applicant falls to be considered against that background. The applicant is a woman who derives assessable income as a marriage celebrant. Her claim relates to the years of income ended 30 June 1982 to 1984 inclusive. During those years she performed some 60 to 80 weddings a year. She did not advertise the availability of her services but depended upon being sought out by persons who had attended at ceremonies at which she had officiated and on recommendations from such persons. She spoke only in general terms of the range of her experience illustrating her points by reference to particular occasions and incidents. I am satisfied that in a significant, but not predominant, number of instances she was called on to travel quite substantial distances to the venue for the ceremony. I also accept that some 80% of the ceremonies she performed were outdoor ceremonies, conducted in venues ranging from garden settings to harbour waters and to farmyards; with ceremonies performed on occasion on horseback, on remote rocky outcrops and on cliff faces reached only with difficulty; and with ceremonies commencing as early as 5 a.m. and as late as midnight. However, I am not persuaded that the extremes of time and place and form which have been mentioned were commonplace.

11. I accept that she is a person who tries to bring dignity and solemnity to the occasion and that, by her participation in the ceremony, she seeks to make the occasion a memorable one for her clients. To that end she seeks to personally present herself in her clothing and grooming so as to take her place within the bridal party without clashing with or detracting from the group by (in her words) being ``overdressed or underdressed''. I accept that. To achieve that she makes a particular point of ascertaining the colour scheme to be followed by other members of the bridal party and the style of garment to be worn by the bride and the others in her party. (By way of illustrating her effectiveness in that regard she explained that on one occasion when the bride had forgotten her dress she made her dress available to the bride and wore another.) When appropriate, she wears hats.

12. As a result, she bears the expense of a wardrobe of hats and garments ranging from the highly formal to the informal which is far more extensive than any wardrobe she would ordinarily acquire. I accept that. I also accept her evidence that it is not her practice to attend receptions as the social functions which follow weddings. I accept that, when as commonly happens following a service, she is to go to some private social function, it is unrelated to the wedding party, and it is invariably her practice to change into other clothing more appropriate to the new situation.

13. It could not be said that the garments worn by the applicant could ever be characterised as a ``uniform''. Nor could it be said that, on the occasion of any particular wedding, she is dressed in a manner which distinguishes her from any other lady (other than the bride should she be traditionally garbed) present at the function who had dressed with the same sense of taste. In short, I am not persuaded that, but for a conscious effort to avoid clashing with the bridal party, that she was dressed in a manner which would have differed from the attire which would have been chosen had she been a guest at the wedding rather than the person officiating as marriage celebrant. To that extent she dresses ``conventionally''.

14. If her claim is to succeed at all it must be because of some characteristic such as the nature of her attendance at, or arising out of the frequency with which she attends, weddings or, perhaps as a consequence of the frequency and variety of weddings, of the need to maintain a far more extensive wardrobe than would otherwise have been the case. In the absence of anything else, that claim too might have been considered doomed to failure, such claims having been previously refused (cf. an unreported decision of the No. 1 Board of Review - of which I was a member).

15. But, as quite often happens, the case as presented centred around the correct interpretation of a Ruling of the Commissioner:

  • Taxation Ruling IT 2409 issued 18 June 1987.

The Ruling prompted me to reconsider the issue. At the outset I observe that, following a report by the Senate Standing Committee on Legal and Constitutional Affairs (November 1987), such Rulings are now published with a warning which implements the following recommendation:

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``2.48 The Committee recommends that each Ruling issued by the Commissioner of Taxation should contain a caveat to the effect that: (i) the Ruling does not have the force of law; and (ii) each decision made within the Australian Taxation office will be considered upon its individual merits as well as pursuant to any relevant Ruling.''

16. The Committee correctly stated that questions such as those to be determined upon this reference must be resolved by reference to the Act and the decided cases. In this instance the standard is set by sec. 51(1) of the Act, which provides:

``All losses and outgoings to the extent to which they are incurred in gaining or producing the assesable income, or are necessarily incurred in carrying on a business for the purpose of gaining or producing such income, shall be allowable deductions except to the extent to which they are losses or outgoings of capital, or of a capital, private or domestic nature, or are incurred in relation to the gaining or production of exempt income.''

Before any loss or outgoing is to be allowed, the taxpayer must first establish a requisite nexus between the expense and the process of carrying out the income-earning activities in question (
F.C. of T. v. White 75 ATC 4018). The expression ``in gaining or producing'' has the force of ``in the course of gaining or producing'' and ``looks rather to the scope of the operations or activities'' and ``the relevance thereto of the expenditure than to purpose in itself''. (Dixon J. (as he then was) in
Amalgamated Zinc (De Bavay's) Ltd. v. F.C. of T. (1935) 54 C.L.R. 295 at p. 309.) ``Whether or not (expenditure) should be so characterised depends upon considerations which are concerned more with the essential character of the expenditure itself than with the fact that unless it is incurred an employee or a person pursuing a professional practice will not even begin to engage in those activities from which their respective incomes are derived'' (per Williams, Kitto and Taylor JJ.
Lunney v. F.C. of T.; Hayley v. F.C. of T. (1957-1958) 100 C.L.R. 478 at p. 499).

16. [sic] In the circumstances of this case I am satisfied that the essential character of the expenditure of the applicant on clothing worn in the course of performing her income-earning activities as a marriage celebrant is determined by her role as a marriage celebrant. The circumstances of the applicant go well beyond those of the lady barrister in Mallalieu v. Drummond (ante) where the issue was whether the cost of purchasing and cleaning and laundering black tights, black shoes, black suits, black dresses and white shirts was deductible. The claim was not allowed despite the lady's preference for more colourful attire. (It was common ground that the cost of barristers' collars was allowable.) It follows in my view that the losses and outgoings incurred by the taxpayer in the provision of clothing as a celebrant will be deductible unless the claim is to be disallowed on the basis that the expenditure was ``of a... private... nature''.

17. There is no general rule of law which says that the cost of clothing is always ``private'' in character and therefore non-deductible. The relevance of ``private'' in sec. 51(1) of the Act is in the characterisation of the expenditure by reference to the person incurring the expenditure. A person who, in the course of income-earning activities, incurs expense in providing clothing for others engaged in those income-earning activities, will be allowed a deduction. In considering claims for deductions in relation to clothing then it is not so much analysis of what it is in relation to which the claim is made but rather in the relationship between the taxpayer as the person claiming the deduction and the expense of providing the clothing in question.

18. It is accepted that the expense to a taxpayer of providing for his own clothing is not always to be characterised as ``private'' It is generally accepted that the cost of clothing may be deductible in some circumstances:

  • • on account of style, whether it be in the way of the soldier's uniform or the priest's robes; or
  • • because it is protective against the elements (Case V79,
    88 ATC 554); or
  • • because it is protective against the extremes of a working environment (the coalminer in Case R80,
    (1966) 16 T.B.R.D. 388); or
  • • because it is protective against extremes of abrasion or soiling (as with the plumber); or

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  • • by reason of the nature of the occupation (the actress or the mannequin; the entertainer or the sportsman).

But where, even in such circumstances, the clothing worn is no more than conventional in the community in which it is worn having regard to considerations of climate, that alone is not ordinarily enough to alter the characterisation of ``ordinary'' clothing as ``private''; something more is required.

19. The question for determination in this reference is whether that ``something more'' as experienced by this applicant is sufficient to alter the characterisation of the clothing worn by her in the course of her income-earning activities as more than merely ``private''. What she points to in that regard is the circumstance that she incurs the expenses in question only by reason of her income-earning activities; that she is expected to dress to a standard of formality determined by the expectations of her clients, the bridal couple, and their family and friends. Were she a man then, like the applicant in Case V68 (
88 ATC 508), she might have had difficulty in persuading the Tribunal that there was anything so special or distinctive about her dress, or the circumstances influencing choices of style, or the number or the variety of garments, to take her claim outside the ``private category''. (I note that in that particular case the claim, which was unsuccessful, related to the gentleman's shirt, belt and shoes - $164. The further amount of $362 claimed as ``clothing'' had been allowed. The lady barrister in Mallalieu v. Drummond (ante) faced a similar problem.) But I accept that the community generally does have different expectations of the gentler sex in matters of the dress and grooming. I am satisfied that, in contrast with the civil male marriage celebrant, the peculiar conditions of her calling, directly attributable to her income-earning activities, do require of her that she has an abnormal number and variety of garments. Even though, by the criteria of her sex and in the context of the social functions in which she carries out her income-earning activities, it would not be fair to describe any particular garments as abnormal, in her circumstances the garments making up her wardrobe were abnormal in number and variety. Had civil marriage celebrants developed a practice of wearing garments as distinctive, and, in that sense, abnormal, as those commonly worn as priestly robes, whether such robes be in such common form as to have the characteristics of a uniform or not, the question probably would not have arisen.

20. I accept that, on any particular occasion, there was nothing so specially distinctive about her clothing as to make the clothing itself special. The art required of her was that she should conform in style to the presentation of the bridal party so as to be neither distinctive nor to detract attention from the role of the bride in the company of her groom as the focal point of attention for the celebration.

21. However, viewed overall, it was required of her that she should attend such a variety of functions as to require of her that she incur the expense of having and maintaining ``an abnormal number (and) variety of garments''.

22. That phrase is adapted from the ruling of the Commissioner in Taxation Ruling IT 2409 which issued 18 June 1987 - long after the years in question, and therefore without influence on the applicant at the time the expenditure in question was incurred. None the less, the Ruling seeks to express a correct view of an old problem and, therefore, is something relied on in the community when people are considering whether to challenge particular decisions of the Commissioner as constituting an incorrect application of sound principles clearly and accurately stated by the Commissioner for the guidance of his officers and the community.

23. In that Ruling it is stated that:

``It is a long established principle of income tax law that income tax deductions are not allowable for expenditure on conventional clothing...''

(I pause to observe that there is an unstated assumption that the expenditure referred to is expenditure of the taxpayer on clothing for himself or herself)

``unless there are peculiar or unavoidable conditions...''

(such as I consider there to be in the circumstance that a marriage celebration remains as a high water mark in the social life of the community and of the couple - an occasion which calls for a special response in the community marked by celebration)

``directly attributable to the activities which produce the assessable income...''

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(as is the case for this applicant whose presence at such functions is attributable solely to income-earning activities)

``that require an abnormal number or variety of garments.''

(in my view, both of those criteria are satisfied.)

``It is considered that the performance of the duties of office of a civil marriage celebrant does not require an abnormal number or variety of garments - essentially it is a matter of personal choice.''

That may be so for male civil marriage celebrants who do not wear anything which might be described as a ``uniform'' or as ``robes of office''. It may be so for some male or female priests or ministers of religion who are marriage celebrants. Some of them may wear abnormal robes or clothing without requiring a wardrobe comprising an abnormal number or variety of such garments. It may even be so in relation to some female civil marriage celebrants. (For example, those who discharge the responsibilities of their office according to a common form in places such as a public registry.) But I do not accept that it is so in relation to all female marriage celebrants or, in particular, to this female marriage celebrant.

24. In Case U95 (
87 ATC 575), in dealing with the claim of a lady who was employed in a leading department store on a part-time basis as a shop assistant, the Tribunal (inter alia) said at p. 580:

``17. There is no one test which will satisfy all facts, but clearly on the decided cases, relevant considerations include:

  • (1) express or implied requirements of the employer or business concerning clothing;
  • (2) the extent to which the clothing is distinctive or unique to the nature of the employment or business having regard to particular, special or accepted work clothing requirements, including its availability to be worn by members of the general public;
  • (3) the extent to which the clothing is used solely for work;
  • (4) the extent to which the clothing is unsuitable for any activity other than work;

and no doubt other factors may become relevant depending on particular facts or circumstances of a given case.''

Applied to the particular circumstances of the applicant it was held that she was not entitled to the deduction sought.

25. In Case U219 (
87 ATC 1221) Deputy President Todd adopted the passage quoted and applied it in disallowing the claim of a plain-clothes policeman. He also applied the test on the same day in disallowing the claim of a sales tax investigator for excess wear and tear (Case U212,
87 ATC 1195); and in relation to another sales tax officer in Case V78 (
88 ATC 548). However, Deputy President Todd, in Case V79 (88 ATC 550), allowed the claim of an applicant in relation to protective clothing worn to protect the applicant from the rigours of a harsh climate, even though the clothing was itself quite conventional clothing, commonly worn by persons exposed to the rigours of that harsh climate whether in the course of, or in association with, their income-producing activities or not.

26. In so far as Taxation Ruling IT 2409 recognises that claims in relation to ``an abnormal number or variety of garments'' may be allowed, it accords with the principles I have cited. It does not create new law, but it does correctly express long-standing principles. Whether the conclusion expressed, as of general application to civil marriage celebrants, applies to this applicant is another matter.

27. Applying the principles so expressed to the present case, I am satisfied that, for at least this applicant, a case has been made out which establishes that the relationship between her clothing and her income-earning activities was such that the consequence was that she was required to have hats and garments suitable only for her income-producing activities and to have such garments in a personal wardrobe in ``abnormal number and variety'' such as to make out a claim to an allowable deduction pursuant to the provisions of sec. 51(1) of the Act. As the quantum of the claim was not the subject of any substantial challenge and there was no suggestion that depreciation was a more appropriate mode of treatment, I shall allow the claims as made for hats and clothing (other than stockings) and for cleaning (to the extent not allowed) in the sums of $532; $455; and $454.

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28. Lest that be thought to be a declaration that all female marriage celebrants are entitled to succeed in similar claims, and succeed to the full extent of the claim made, it is appropriate to say that that happens to be no more than a particular finding upon the particular evidence presented.

29. Other claims remain to be considered. They relate to shoes ($360 - 1982 only); hairdressing ($649; $80; and $80); stockings ($15 - 1982 only) and cosmetics ($40 each year). Important though the contribution of each may be to the total presentation of the taxpayer as a marriage celebrant and, despite the fact that neglect in one or more of these matters might destroy the value in otherwise being well-dressed, I am not persuaded that in any of these matters the income-earning activities put the applicant to any expense such as would not ordinarily and properly be understood as being ``private'' in character. In reaching that conclusion I have applied the principles expressed earlier as to clothing. That being so, in these respects upon the evidence presented before me, the claim will fail.

30. The decision of the Tribunal will be that the determination of the Commissioner upon the objection under review be varied and that the taxable income of the applicant for the years of income ended 30 June 1982, 1983 and 1984 be reduced by the sums of $532, $455 and $454 respectively.

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