Edited version of your written advice

Authorisation Number: 1012708115128

Ruling

Subject: Clothing

Question

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

Answer

No.

This ruling applies for the following period

Year ended 30 June 2014

The scheme commenced on

1 July 2013

Relevant facts

You work for a clothing retailer.

You are supplied with shirts and jackets with logos.

On specific days, you must wear clothing related to special events. You are required to purchase this clothing.

Your employer enforces the wearing of footwear, pants and socks that are sold in the store.

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 Income tax and fringe benefits tax: work related expenses: deductibility of expenses on clothing, uniform and footwear (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 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 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 Income tax: deductibility of protective items 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.

In your case, you are required to purchase clothing from your employer and wear it to work. 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 and shoes for work is not deductible.