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Ruling

Subject: work related expenses - clothing

Question

Are you entitled to a deduction for the cost of jeans worn in your employment?

Answer

No

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You are employed.

You wear jeans to work to protect you against the sun, insects and abrasions.

You submit that your jeans become so soiled from your work use that they are not suitable for any other use.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

You are not entitled to a deduction for the cost of the jeans that you wear to work as they are private in nature.

Detailed reasoning

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.

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 barrister's robes, a chef's chequered trousers and a nurse's 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 bank's 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 identifies 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

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

Deductibility of conventional clothing including jeans

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. While there is no universal rule that conventional clothing can never be deductible, in most cases expenditure on conventional clothing will not be deductible.

TR 2003/16 discusses, at paragraph 37, denim jeans and similar items of clothing:

Conventional clothing you wear at work, such as jeans, drill shirts and shorts, trousers and socks, may have some protective qualities. However, this in itself is not necessarily sufficient to give your expenditure on these items the character of a working expense. The limited level of protection against illness or injury in the workplace which this clothing gives you usually means that the essential character of the expenditure is private.

In your case, your jeans protect you against the sun, insects and abrasions, however this is insufficient to classify jeans as an item of protective clothing.

Your application refers us to the deductibility of shearers' jeans in TR 2003/16. The ruling points out that certain items, like jeans which repel lanolin, are deductible because they are made specially for shearers. The ruling goes on to state that if the jeans were ordinary clothing rather than protective types made specially for shearers they would not be able to claim a deduction for the cost of the clothing (paragraph 55).

Your application also states that your jeans become so soiled at work that they are useless for conventional use. The soiling of your work clothes is not something peculiar to your occupation. For example, builders, painters, mechanics, gardeners, etc have work environments where clothing is exposed to harsh conditions and is soiled to the point where it can't be worn outside of work. Soiling is readily preventable by the wearing of protective overalls.

Therefore, the cost of purchasing jeans to wear to work is not deductible under section 8-1 of the ITAA 1997. The expenditure has the essential character of a private expense.