ATO Interpretative Decision
ATO ID 2002/910 (Withdrawn)
Volunteer Firefighter - Purchase of Equipment
||This ATO ID is withdrawn. Guidance on the issue contained in this ATO ID can be found at the following Deductions you can claim (QC 31967).
||This document has changed over time. View its history.
Status of this decision: Decision withdrawn 22 September 2017.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is the taxpayer entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the cost of firefighting equipment which will be used in their work as a volunteer firefighter?
No. The taxpayer is not entitled to a deduction under section 8-1 of the ITAA 1997 for the costs for firefighting equipment which will be used in their work as a volunteer firefighter.
The taxpayer is a volunteer firefighter.
The taxpayer is required to have their own firefighting equipment as the council only issues them with basic fire protection equipment.
The taxpayer intends to purchase various items of firefighting equipment.
The taxpayer received a taxable payment from Centrelink as a reimbursement for any pay lost from their normal employment whilst the taxpayer was in volunteer fire service.
As a volunteer the taxpayer receives no other payment for their firefighting services.
Reasons for Decision
Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred by an individual 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.
A number of significant court decisions have determined that, for an expense to satisfy the tests in section 8-1 of the ITAA 1997:
- it must have the essential character of an outgoing incurred in gaining assessable income or, in other words, of an income producing expense ( Lunney & Hayley v. Federal Commissioner of Taxation (1958) 100 CLR 478;  HCA 5; (1958) 7 AITR 166; (1958) 11 ATD 404)
- there must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income ( Ronpibon Tin NL & Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47;  HCA 15; (1949) 4 AITR 236; (1949) 8 ATD 431); and
- it is necessary to determine the connection between the particular outgoing and the operations or activities by which the taxpayer most directly gains or produces his or her assessable income ( Charles Moore & Co (WA) Pty Ltd v. Federal Commissioner of Taxation (1956) 95 CLR 344;  HCA 77; (1956) 11 ATD 147 (1956); 6 AITR 379; FC of T v. Cooper (1991) 29 FCR 177;  FCA 164; 91 ATC 4396; (1991) 21 ATR 1616; Roads and Traffic Authority of NSW v. FC of T (1993) 43 FCR 223;  FCA 314; 93 ATC 4508; (1993) 26 ATR 76; Federal Commissioner of Taxation v. Hatchett (1971) 125 CLR 494;  HCA 47; 71 ATC 4184; (1971) 2 ATR 557).
The taxpayer received a payment from Centrelink which was paid as compensation for any lost wages whilst the taxpayer was in volunteer fire service. The expenditure to be incurred will not have the required nexus with the Centrelink payment as the amount was not paid to the taxpayer for their services as a firefighter.
The expenditure will therefore not be incurred in the course of gaining or producing the taxpayer's assessable income. Consequently, the taxpayer will not be entitled to a deduction under section 8-1 of the ITAA 1997 for the costs of firefighting equipment which they will use as a volunteer firefighter.
|Date of Amendment
|31 August 2015
||Removed name of payment from Centrelink
||Reasons for Decision
||Added to case references
||Added to case references
Date of decision: 6 September 2002
|Year of income:||Year ending 30 June 2003|
Income Tax Assessment Act 1997
Lunney & Hayley v. Federal Commissioner of Taxation
(1958) 100 CLR 478
 HCA 5
(1958) 7 AITR 166
(1958) 11 ATD 404
Ronpibon Tin NL & Tong Kah Compound NL v. Federal Commissioner of Taxation
(1949) 78 CLR 47
 HCA 15
(1949) 4 AITR 236
(1949) 8 ATD 431
Charles Moore & Co (WA) Pty Ltd v. Federal Commissioner of Taxation
(1956) 95 CLR 344
 HCA 77
(1956) 11 ATD 147
(1956) 6 AITR 379
FC of T v. Cooper
(1991) 29 FCR 177
 FCA 164
91 ATC 4396
(1991) 21 ATR 1616
Roads and Traffic Authority of NSW v. FC of T
(1993) 43 FCR 223
 FCA 314
93 ATC 4508
(1993) 26 ATR 76
Federal Commissioner of Taxation v. Hatchett
(1971) 125 CLR 494
 HCA 47
71 ATC 4184
(1971) 2 ATR 557
Protective clothing expenses
Fire fighting & prevention equipment
Siebel/TDMS reference number: TDMS/Siebel case: CW3136755/1-6P08QSX
Business line: Small Business/Individual Taxpayers
Date of publication: 16 September 2002