Income tax: cosmetics and other personal grooming expenses
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FOI status: may be released
| What this Ruling is about || 1 |
|Class of person/arrangement||1|
| Date of effect || 4 |
| Ruling || 5 |
| Explanations || 7 |
|Deduction not allowable||10|
| Examples || 14 |
| Alternative views || 20 |
| This Ruling, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Ruling is a public ruling and how it is binding on the Commissioner.
[Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.]
What this Ruling is about
Class of person/arrangement
1. This Ruling sets out our views on the deductibility,
under subsection 51(1) of the Income Tax Assessment Act 1936
(the Act), of expenses incurred in respect of cosmetics and other
personal grooming expenses, following the decision of the Federal Court
of Australia in Mansfield v. FC of T
96 ATC 4001; (1995) 31 ATR 367 ( Mansfield's
2. In Mansfield's
case the Court also dealt with the deductibility of expenditure on
rehydrating moisturiser, and on rehydrating hair conditioner and shoes
and stockings worn as part of a compulsory uniform. These matters are
covered in Taxation Rulings TR 96/17 and TR 96/16 respectively.
3. Cosmetics and personal grooming expenses include the
cost of perfume, after shave, deodorant, nail polish, nail or hair care
products, skin care products, lipstick, foundation and other make-up,
hair spray, hair styling, haircuts, hair colouring, hair perm, and other
personal care or related products or
'Cross references of provisions
3A. This Ruling refers to case law on subsection 51(1) of the Act and how that subsection applies to expenses incurred in respect of cosmetics and other personal grooming expenses. Subsection 51(1) of the Act expresses the same ideas as section 8-1 of the Income Tax Assessment Act 1997 ('the 1997 Act'). The references to subsection 51(1) of the Act should be read as references to section 8-1 of the 1997 Act.
Date of effect
4. This Ruling applies to years commencing both before and after its date of issue. However, the Ruling does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Ruling (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).
Note: The Addendum to this Ruling that issued on 4 August 1999, applies in relation to the 1997-98 or a later income year.
5. The decision in Mansfield's
case confirms the long standing view that, as a general rule,
expenditure on cosmetics and personal care and grooming is private in
nature and not deductible.
6. However, this rule is not of universal application and
it is possible in special circumstances for there to be a sufficient
connection between the expenditure and the income earning activities of
the taxpayer. For example, it is accepted that a deduction may be
allowable for some stage make-up and grooming expenses incurred by
performing artists when performing a role (see Taxation Ruling TR 95/20,
paragraphs 109 to 111). See also Taxation Ruling TR 96/17 dealing with
expenditure on rehydrating moisturiser and rehydrating hair conditioner
where there was a requirement that the taxpayer be well groomed and
where the occasion of the expenditure was found in the harsh working
7. Expenditure on cosmetics and other personal grooming
expenses falls for consideration under subsection 51(1) of the Act. In
so far as it is relevant for present purposes, subsection 51(1) provides
'... outgoings to the extent to which they are incurred in
gaining or producing the assessable income, ... shall be allowable
deductions except to the extent to which they are ... outgoings of ...
private or domestic nature ...'
8. For expenditure by an employee to be deductible under
the first limb of subsection 51(1), the High Court of Australia has
indicated that the expenditure must have the essential character of an
outgoing incurred in gaining assessable income or, in other words, of an
income-producing expense ( Lunney v. FC of T
(1958) 100 CLR 478 at 497-498). There must be a nexus between the
outgoing and the assessable income so that the outgoing is incidental
and relevant to the gaining of the assessable income ( Ronpibon Tin
NL v. FC of T
(1949) 78 CLR 47). Consequently, it is necessary to determine the
connection between the particular outgoing and the operations by which
the taxpayer more directly gains or produces his or her assessable
income ( Charles Moore & Co (WA) Pty Ltd v. FC of T
(1956) 95 CLR 344 at 349-353; FC of T v. Cooper
91 ATC 4396 at 4403; (1991) 21 ATR 1616 at 1624; Roads and Traffic
Authority of NSW v. FC of T
93 ATC 4508 at 4521; (1993) 26 ATR 76 at 91). Whether such a connection
exists is a question of fact to be determined by reference to all the
facts of the particular case.
9. In most cases a sufficient connection will not exist
between expenditure on cosmetics and personal grooming and the
derivation of income by an employee taxpayer, and the expenditure will
be private in nature: see Mansfield's
Deduction not allowable
10. The decision of Mr Justice Hill in
case, which concerned a flight attendant, confirmed that expenditure on
hairdressing and make-up is essentially of a non-deductible private
nature. The fact that an allowance for grooming was paid and that the
employer required its employees to be well groomed, did not alter the
private nature of the expenses.
11. In Mansfield's
case Mr Justice Hill stated (ATC at 4008; ATR at 374):
'... it becomes unnecessary to consider whether that part of the
amount which Mrs Mansfield expended on makeup would be deductible.
However, as presently advised I do not think that it would. Even if
makeup as such is required by the airline as an incident of the
employment, I am presently of the view that makeup retains an essential
personal characteristic which excludes it from
12. In Mansfield's
case, the Court also considered claims for hair spray, styling,
cutting, conditioner applied by the hairdresser, conditioner applied at
home, shampooing at the hairdresser and shampoo purchased for use at
home. The Court allowed a deduction for the additional cost of
rehydrating conditioner necessitated by the lack of humidity in the
pressurised environment of the aircraft cabin, but found the remaining
expenditure on hairdressing was not deductible. When considering the
non-deductibility of hairdressing expenditure, Mr Justice Hill stated
(ATC at 4009; ATR at 376):
'The fact that Mrs Mansfield was required by her employer to be
well groomed and presentable does not of itself operate to confer
deductibility. Expenditure on hairdressing is of a private nature. There
is no additional feature which shows any relationship between the
expenditure on the one hand and Mrs Mansfield's employment as a flight
attendant. The expenditure does not have the character of
employment-related expenditure and in my view is not deductible. Her
selection of a perm, which requires somewhat regular maintenance, is her
choice. It is not occasioned by her employment.'
13. A deduction may be allowable for some make-up and
hairdressing costs incurred by a performing artist when performing a
role. The cost of maintaining a particular hairstyle or length for a
role is an allowable deduction. A deduction is allowable for the cost of
stage make-up, including cleansing materials to remove stage make-up. A
deduction is not allowable for the cost of cleansing materials to
relieve skin conditions (see Taxation Ruling TR 95/20 at paragraphs 109
14. Brian, an officer in the Australian Defence Forces
(ADF), is required to maintain a short back and sides hair style.
Failure to meet the rigid requirements set by the ADF could result in
disciplinary action being taken. Consequently, Brian has his hair cut
twice a month and wishes to claim a deduction for this expense.
15. A deduction is not allowable for the cost of Brian's
hair cuts as this is a private expense. The fact that Brian's employer
has rigid grooming standards does not alter the private nature of the
16. Sarah is an executive secretary to the managing
director of an international company. She is required to be well groomed
at all times when at work. When accepting her position, her employer
made it very clear that good grooming was of critical importance to the
organisation and that her presentation would be regularly monitored. In
recognition of the importance of grooming to her employer, Sarah is paid
a grooming allowance of $20 per week. Sarah wants to claim expenses
incurred on hairdressing and cosmetics that relate solely to work and
for which she receives an allowance.
17. The receipt of an allowance does not necessarily mean
that a deduction is automatically allowable for any related expenses.
The additional feature that Sarah's employer requires good grooming is
not sufficient to alter the characterisation of the expense as
essentially private in nature.
18. Alan is an entertainer. As part of his act he
portrays himself as an aged person. Alan wishes to claim a deduction for
the stage make-up and make-up remover he uses to make himself appear
older than he actually is.
19. Alan would be allowed a deduction for the cost of the
stage make-up used while he is playing the role of the aged person as
part of his act.
20. The view has been expressed that, in appropriate
circumstances, abnormal amounts of expenditure on personal care items
may be deductible, based on the decision FC of T v. Edwards
(1994) 49 FCR 318; 94 ATC 4255; (1994) 28 ATR 87 ( Edwards'
21. In Edwards'
case the Full Federal Court found that the Administrative Appeals
Tribunal was open to decide that, on its findings of the facts, the
taxpayer was entitled to a deduction for expenditure on additional
clothing (including hats, gloves and black tie formal evening
22. The taxpayer in Edwards'
case was the personal secretary to the wife of the Governor of
Queensland. Her additional changes of clothing throughout the day solely
served work related purposes as they enabled her to attend the
Governor's wife at many different types of functions. The Full Federal
Court supported the decision of the Tribunal that there was a direct
nexus between the allowable expenditure and the taxpayer's
income-producing activity and also that the essential character of the
expenditure was not to clothe herself in any usual sense as part of
daily life, but to enable her to perform satisfactorily the duties of
23. The Full Federal Court in Edwards'
case noted that the decision turned on its own special facts (see 94
ATC at 4259; 28 ATR at 91 and Taxation Ruling TR 94/22 at paragraph
24. While there may be circumstances where expenditure
for personal care products will be deductible (see for example paragraph
6 above), it is considered that the decision in Mansfield's
case supports the view that expenditure on cosmetics, hair care and
other personal grooming products is usually a private expense regardless
of the amount of expenditure involved.
Commissioner of Taxation
29 May 1996
Previously released in draft form as TR 96/D4
NO 96/4510-1 96/764-5
ISSN 1039 - 0731
- allowable deductions
- non-allowable deductions
- ITAA 51(1)
Charles Moore & Co (WA) Pty Ltd v. FC of T
(1956) 95 CLR 344
FC of T v. Cooper
91 ATC 4396
(1991) 21 ATR 1616
FC of T v. Edwards
(1994) 49 FCR 318
94 ATC 4255
(1994) 28 ATR 87
Lunney v. FC of T
(1958) 100 CLR 478
Mansfield v. FC of T
96 ATC 4001
(1995) 31 ATR 367
Roads and Traffic Authority of NSW v. FC of T
93 ATC 4508
(1993) 26 ATR 76
Ronpibon Tin NL v. FC of T
(1949) 78 CLR 47