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Ruling

Subject: Work related expenses

Question

Are you entitled to a deduction for health and beauty treatments?

Answer

No.

This ruling applies for the following period:

Year ended 30 June 2011

The scheme commenced on:

1 July 2010

Relevant facts and circumstances

You are employed as a lecturer.

You lecture in areas of beauty and health.

You have incurred expenses in relation to various beauty treatments.

You state you are required to have knowledge of the current beauty treatments on the market so you can advise your students on these treatments.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision

Detailed reasoning

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, or relate to the earning of exempt income.

In establishing a connection, it must be shown that the outgoing is relevant and incidental to the gaining of assessable income (ATO Interpretive Decision ATO ID 2002/319).

Taxation Ruling TR 96/18 considers the deductibility of personal grooming related expenses such as hair care, nail care and other personal care or related products or treatments. TR 96/18 states that as a general rule, expenditure on cosmetics and personal care and grooming is private in nature and not deductible.

There are some exceptions to this rule, such as a performing artist who is required to maintain hair and make-up for a particular role or in circumstances where a taxpayer is required to work in harsh working conditions. However there is an onus on the taxpayer to prove that such an outlay should be an allowable deduction.

This was highlighted in Case P30 25 CTBR (NS); Case 94 82 ATC 139 when the board of review disallowed a claim for the purchase of newspapers by a real estate salesman. The real estate salesman would gather information from the daily papers to assist him in selling real estate. The salesman was, however, unable to demonstrate that his income was affected by expenditure on the newspapers. The expense retained its private character and the deduction was not allowed.

In your situation, while it is acknowledged that having experience and knowledge of the current beauty treatments and products on the market would improve your general knowledge in this area and enable you to advise your students, the expense is not necessarily incurred. Expenses in relation to health and beauty treatments and products have the character of private expenses. The fact that you believe as a lecturer you are required to have knowledge of these treatments does not alter the private nature of the expenses. The necessary connection is too general or tenuous to allow a deduction for any portion of the cost (ATO ID 2002/319). Therefore you are not entitled to a deduction for beauty treatment expenses under section 8-1 of the ITAA 1997.