Edited version of private ruling

Authorisation Number: 1011860637751

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Ruling

Subject: Deduction for clothing

Question

Are you entitled to a deduction for conventional clothing worn for work?

Answer

No.

This ruling applies for the following periods

Year ended 30 June 2006

Year ended 30 June 2007

Year ended 30 June 2008

Year ended 30 June 2009

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

Year ended 30 June 2013

Year ended 30 June 2014

Year ended 30 June 2015

The scheme commenced on

1 July 2005

Relevant facts

You are a designer.

You purchase clothing from a department store to wear for work.

Your clothing is not of a protective nature, is smart casual and does not have any work logo.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

Taxation Ruling TR 97/12 considers the deductibility of work related clothing, uniform and footwear expenses.

The ruling states that generally the cost of buying clothing will be regarded as an expense of a private nature. Clothing is necessary for protection of the body from the elements and to meet social norms of modesty, fashion or similar conditions.

The circumstances where expenditure for clothing is considered to be deductible are where the clothing is:

· occupation specific clothing

· a compulsory uniform/wardrobe

· a non-compulsory uniform/wardrobe

· protective clothing and footwear

Occupation specific clothing

Occupation specific clothing distinctively identifies the wearer as a person associated with a particular profession, trade, vocation, occupation or calling. Examples are cleric's ceremonial robes, a barristers robes, a chefs chequered trousers and a nurses traditional uniform.

Compulsory uniform/wardrobe

A compulsory uniform/wardrobe must be prescribed by the employer in an express policy which makes it a requirement for the employees to wear that uniform while at work. The uniform/wardrobe needs to be sufficiently distinctive so that the casual observer can clearly identify the employee as working for the particular employer. 

An example of this is a banks corporate wardrobe with the corporate logo or emblem clearly visible.

Non-compulsory uniform/wardrobe

A non-compulsory uniform/wardrobe is a set of one or more items of clothing that distinctively identify the wearer as a person associated, directly or indirectly, with an employer.

A deduction is only allowable for a non-compulsory uniform/wardrobe where the design of the uniform/wardrobe has been entered on the Register of Approved Occupational Clothing that is maintained by the Department of Industry, Tourism and Resources. 

An example of this may be a polo shirt with the business registered logo embroidered on it.

Protective clothing and footwear

Taxation Ruling TR 2003/16 provides guidelines on the deductibility of protective items, including footwear used for protection against injury.

Expenditure on a protective item will have a sufficient connection with the earning of your assessable income where:

· you are exposed to the risk of illness or injury in the course of carrying out your income earning activities;

· the risk is not remote or negligible it would be a real risk to anyone who worked where you are required to work;

· the protective clothing is of a kind that provides protection from that risk and would reasonably be expected to be used in the circumstances; and

· you use the item in the course of carrying out your income earning activities.

Conventional clothing

TR 97/12 also considers the deductibility of conventional clothing. Conventional clothing is everyday clothing that would ordinarily be worn, or which could reasonably be worn, by a person irrespective of whether that person is working or not, for example, a pair of jeans or a shirt.

TR 97/12 states that expenditure on conventional clothing is often not an allowable deduction as there is not usually a sufficient connection between the expenditure and the income earning activities of a taxpayer.

Factors that are relevant to the question of whether a sufficient connection exists so that the essential character of the expense is work related rather than private in nature include:

· express or implied requirements of the employer or business concerning clothing;

· 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;

· the extent to which the clothing is worn solely for work;

· the extent to which the clothing is unsuitable for any activity other than work.

A deduction for conventional clothing was allowed in Federal Commissioner of Taxation v. Edwards 94 ATC 4255; 28 ATR 87 (Edward's case). In Edward's case, the taxpayer worked as the personal secretary to the wife of the Governor of Queensland.  She sought a deduction for expenses incurred in purchasing hats, gloves and formal gowns which she was required to purchase to fulfil the duties of her position.  The taxpayer was expected to dress in a manner compatible with the Governor's wife.  It was determined that the additional clothing purchased was over and above the personal requirements of her normal attire for private use. 

Whilst the additional nature of the clothing is a relevant factor to be taken into account, it will not be sufficient where the income earning activities do not turn upon the wearing of the additional clothes and where they are not specific and suited only for the income earning activity. 

In your case, you purchase clothing from a department store. It is not considered to be part of a compulsory or non-compulsory uniform or to be protective in nature and does not identify you as a member of any specific profession. Therefore the clothing cannot be considered to be occupational specific clothing. The clothing is considered to be conventional in nature, and is available to the general public and is not distinctive or unique to the nature of your work. It is not considered that the essential character of the expenditure is work related.

Therefore, the cost of purchasing clothing for work is not deductible.

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