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Edited version of your private ruling
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Ruling
Subject: Deductibility of work related expense
Question:
Are you entitled to a deduction for expenses incurred in undergoing a health assessment which is required to maintain your passenger vehicle licence?
Answer:
Yes.
This ruling applies for the following period:
Year ended 30 June 2012
The scheme commenced on:
1 July 2011
Relevant facts
You are over 60 years of age.
You are employed as a driver of a public passenger vehicle.
As a result of your employment you are required to hold a public passenger vehicle licence.
In order to acquire or renew a public passenger vehicle licence a driver is required to undergo a health assessment every 3 years, however as you are over the age of 60 you are required to undergo a health assessment annually.
When you undergo a health assessment a notice from your doctor that states that you are fit to drive a passenger vehicle is sent to the minister of transport for accreditation.
You have not been reimbursed for the expense incurred in undergoing the health assessment.
Relevant legislative provisions
Income Tax Assessment Act 1997, Section 8-1.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 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, or relate to the earning of exempt income.
The cost of acquiring or renewing a driver's licence is generally not an allowable deduction as it is considered an expense that is capital or private in nature. However some employees may need an endorsed licence to perform their duties, and therefore any expenses incurred as a result of renewing the licence may be an allowable deduction.
Taxation Ruling TR 95/19 Income tax: airline industry employees - allowances, reimbursements and work-related deductions; provides the Commissioner's view on certain work related expenses that are considered to be an allowable deduction. Although TR 95/19 relates to airline employees, the principles are relevant in your circumstances.
Taxation Ruling TR 95/19 provides that a deduction is allowable for the expenses associated with medical examinations for the renewal of relevant licences. An endorsed passenger vehicle licence is considered a relevant licence for the purpose's of TR 98/19.
In your case, you have incurred expenses in undergoing a health assessment in order to maintain an endorsed passenger vehicle licence which is a requirement of your employment. Therefore as the expense incurred is a requirement for maintaining your endorsed passenger vehicle licence it is sufficiently related to the earning of your assessable income is not considered to be capital or private in nature.
Accordingly, you are entitled to a deduction for the expenses incurred in undergoing the health assessment under section 8-1 of the ITAA 1997.
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