ATO Interpretative Decision
ATO ID 2001/7 (Withdrawn)
Deductions: Clothing Expenses
FOI status: may be released
Status of this decision: Decision Withdrawn 1 April 2010
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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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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.
Whether expenditure by the television presenter on clothing and personal care products is allowable as a deduction under section 51(1) (Income Tax Assessment Act 1936) against assessable income.
Expenditure by the television presenter on clothing and personal care products is not allowable as a deduction under section 51(1) (Income Tax Assessment Act 1936) against assessable income.
The taxpayer is a television presenter. As a television presenter, the taxpayer is expected to be presented impeccably and consequently incurs expense in relation to conventional clothing, dry cleaning, hair colouring and cuts, facials and make-up products far in excess of normal requirements.
Reasons For Decision
For expenditure by an employee to be deductible, the expenditure must have the essential character of an outgoing incurred in gaining assessable income. It is not sufficient that the expenditure is a prerequisite to the derivation of assessable income. It must contribute to the derivation of that income.
The clothing purchased by the taxpayer is not part of a uniform nor of a special nature to be worn in unusual circumstances (cf FC of T v Edwards 1994 ATC 4255; (1994) 28 ATR 87). Expense incurred by the taxpayer in relation to clothing is incurred in order for the taxpayer to be able to commence her work duties and is private in nature. Similarly, the expenditure on hairdressing, cosmetics and other personal grooming products purchased by the taxpayer is of a private nature regardless of the amount of expenditure involved.
Date of decision: 6 April 1998
Income Tax Assessment Act 1936
1996 ATC 640
AAT Case 11,455
(1996) 34 ATR 1098
FC of T v. Edwards
1994 ATC 4255
(1994) 28 ATR 87
Lunney v. FC of T
(1958) 100 CLR 478
Mansfield v. FC of T
1996 ATC 4001
(1996) 31 ATR 367
Ronpibon Tin v. FC of T
(1949) 78 CLR 47
Related Public Rulings (including Determinations)
Deductions and expenses
Business Line: Small Business/Individual Taxpayers
Date of publication: 4 June 2001