87 ATC 470
BJ McMahon SM
Administrative Appeals Tribunal
Judgment date: 31 March 1987.
B.J. McMahon (Senior Member): In her return of income for the year ended 30 June 1984, the applicant claimed deductions under sec. 51(1) of the Income Tax Assessment Act 1936 in respect of clothing which she purchased and for dry cleaning of that clothing. The objections having been disallowed, the applicant seeks a review of the decision of the respondent by this Tribunal.
2. She did not appear on the hearing of the application, although she had previously attended a preliminary conference in response to a letter sent to the same address as that notifying her of the date and time of this
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hearing. I am satisfied that she received proper notice of the hearing. Commencement of the hearing was delayed for almost half an hour to await her appearance. In her absence, I decided to exercise the powers of the Tribunal under sec. 40(1)(b) of the Administrative Appeals Tribunal Act 1975 and to proceed to a hearing in her absence.
3. I relied upon the evidence of two letters written by the applicant to the respondent, the first being the original objection and the second being the request to refer the matter to this Tribunal. The first letter, dated 3 October 1984, omitting formal parts, read as follows:
"I refer to your notice of assessment dated 4/9/84 (Ref: 293670/003) and wish to object to your adjustment re disallowment of my claim for deduction of expenses of uniforms and dry cleaning as follows:
During the year ended 30/6/84, I was employed as a shop assistant/salesperson with David Jones (Australia) Pty Ltd in their Elizabeth St. Sydney store.
As a condition of employment, I was compelled to wear special clothing to gain my assessable income. This clothing is described as `all black', i.e., black underwear and shoes, black dress, or black skirt with black blouse, flesh or black coloured stockings, black cardigan or pullover (if necessary). No other colour is permissible.
This clothing does not constitute a recognized uniform but is definitely peculiar to my occupation and was used only during working hours, and was, in my opinion, according to my preferences, unsuitable for ordinary use. Therefore, expenditure on this type of clothing should not be regarded as private. During a normal year, I am required to purchase 3 winter dresses, 3 black skirts, 6 blouses, underwear, & 2 pairs of black shoes. Black does not suit me for private use.
Whilst wearing the clothing as described above, in the dirty/dusty conditions of storerooms and stock reserves, it became soiled, requiring dry cleaning treatment. In any case, the style, and texture of the relative materials, demands that the clothing be dry cleaned rather than washed normally, in order to maintain its quality appearance. Dry cleaning was carried out by Edgecliff (Golden) Dry Cleaners of the Edgecliff Centre, 203 New South Head Rd., Edgecliff. The cost of each cleaning is $5 and was incurred 36 times during the financial year.
I do not receive any allowance from my employer as a reimbursement for clothing or dry cleaning expenditure. They do not pay any such accounts on my behalf. I am not provided with any items of clothing by my employer. I do, however, receive a discount of 10/20% on clothing if it is purchased from David Jones. This discount has been taken into account when calculating the expenses incurred.
Would you please reassess my claim as outlined and advise me in due course."
4. The second letter, dated 24 January 1985, omitting formal parts, read as follows:
"I refer to your letter of 21/1/85 and advise that I am dissatisfied with your decision not to allow my claim for deductions for clothing and laundry.
I maintain that the expenditure was incurred in producing my assessable income. The expenditure as stated in my original claim and subsequent objection refers to the purchase and maintenance of distinctive black clothing as specified by employer and indeed is a definite condition of employment.
The `true test' is that should I attempt to wear clothing other than that specified by my employer, such employment would be terminated. A simple enquiry to them would confirm that fact.
I therefor [sic] enclose the fee of $2 and would be pleased if you would refer my objection to a Board of Review."
5. Two questions therefore arise for decision. The first question deals with deductibility for the cost of the black clothing.
6. The evidence indicates that apart from the colour, which does not suit the applicant for private use, the clothing was not otherwise distinctive or of an unusual nature. There is no evidence that it was monogrammed or had any
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other characteristics of a uniform. I should add that for the purposes of this decision, I accept all that the applicant says in her letters as being true, even though not tested in cross-examination, and even though the applicant bears the onus of proving her objection.
7. There have been many cases where the cost of purchase of conventional attire of a particular colour have been held to be expenses of a domestic nature and therefore excluded from deductibility under sec. 51(1) of the Act. There have even been many other cases of employees of large chain stores who have been required to wear the same type of clothing as the applicant, failing in their claims for similar deductions. All these decisions restate from time to time well known principles of taxation law which this Tribunal would normally follow.
8. A review of the relevant cases was undertaken by Taxation Board of Review No. 3 in Case H2,
76 ATC 7. There, the Chairman said at pp. 7-8:
"The case is one of a kind that has fairly frequently come up for consideration by Boards of Review, and with a view to achieving a degree of consistency in their decisions, the Boards have attempted to develop certain tests for determining the deductibility of moneys expended on occupational clothing. However, in spite of these efforts to apply consistent principles in this particular field of inquiry, I doubt whether all the decisions can be reconciled with one another.
4. In considering the present reference, there is perhaps no necessity to attempt to reason from generalised concepts to particular instances, because there are decisions by other Boards of Review based upon facts which are in all material respects indistinguishable from the facts of this reference. The first of these is the majority decision of Board of Review No. 2 in
14 C.T.B.R.(N.S.) Case 2. In that case the taxpayer concerned was employed as a saleswoman in a large retail establishment. Under her employer's house rules, she was required to wear a black dress, which she had to purchase and maintain. This dress was worn by the taxpayer only during her hours of employment. Disallowing the taxpayer's claim, the majority held that the expenditure was of a private nature, and did not satisfy the `necessary and peculiar' test adopted by Board of Review No. 1 in
8 T.B.R.D. Case H61.
5. The decision of Board of Review No. 1, issued on 12th December, 1975, and reported as Case G81,
75 ATC 572, is the second case which I would regard as identical in all essential aspects with the present one. There the taxpayer, a fashion supervisor at a department store, was required to wear a black dress, with certain restrictions as to style, length and trimmings. Confirming the assessment, the Board held the expenditure in question was of a private nature, and was therefore, excluded from deductibility under sec. 51. In the Board's opinion, the clothing did not satisfy either the `necessary and peculiar' test or the `abnormal expenditure on conventional clothing' test.
6. This Board is not bound to follow the decisions of the other Boards, but it will normally do so unless it is convinced that its counterparts elsewhere have fallen into error. In the present instance, so far from holding any view that the above quoted cases were wrongly decided, I am firmly of the opinion, with respect, that those cases were correctly decided, and that I, in the present reference, must likewise come to a conclusion that is adverse to the taxpayer."
9. The reasoning in that case has been applied in many other decisions. A recent example will be found in a decision of this Tribunal, No. 002988, 6 November 1986 [reported as Case T83,
86 ATC 1114], where an army officer cadet, who was expected to have one good quality lounge suit to be worn at various army functions, was denied a deduction for the cost of that suit.
10. The fact that the employer requires garments of a particular colour to be worn and would even terminate the employment if another colour was substituted, does not in any way detract from the character of the garments as conventional attire, the cost of which must be regarded as a private expense. The clothing must possess distinctive and unique features that remove it from the type of wearing apparel that is capable of unfettered use by the public at large before it can be categorised as clothing to
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which relevant expenses may be regarded as work expenses.
11. The second claim deals with the cost of dry cleaning the work clothing in the year of income in question. Having come to the conclusion on the evidence before me that the apparel is not "necessary and peculiar" as that phrase has come to be understood in many decisions, it would follow that the cost of dry cleaning that apparel would also not be deductible unless it met the "abnormal expenditure on conventional clothing" test.
12. In Case M28,
80 ATC 187, the nature of this test is set out at some length in the following words at p. 190:
"The dry cleaning costs due to a work environment of chalk dust come close to deductibility, but the circumstances are not quite `abnormal' enough. I agree with the two criteria for determining whether clothing costs are deductible that have emerged from a long list of Board cases. In the first place expenditure on clothing that is `necessary and peculiar' to an occupation ceases to be private and, secondly, expenditure resulting from excess wear and tear due to the nature of the occupation is deductible. This latter criterion is described by a former Chairman of this Board as `the abnormal expenditure on conventional clothing test' (Case A45,
69 ATC 270). In this review I reject the claim because it seems to me chalk dust is readily brushed out of suits and is not an element that causes dry cleaning more frequently than would otherwise be the case. It is not, for example, of the same order as the soiling of work clothes with greasy substances or damage by acid splashes and the like."
13. The above remarks refer to a claim by a lecturer for cleaning expenses of suits which, it was alleged, became excessively dirty from chalk dust in the course of his lecturing duties. There is nothing in the evidence before me that the soiling of the applicant's garments due to dirty or dusty conditions of her employer's storerooms or stock reserves is sufficiently serious as to constitute abnormal expenditure. The evidence indicates that the degree of soiling is probably no greater than that referred to in the extract quoted above. No abnormal risks such as those referred to above have been demonstrated. There is no evidence, furthermore, that all the items of clothing were cleaned 36 times during a year, or that if this was so, that that fact would constitute abnormal expenditure due to work related conditions. The style and texture of the relative materials said to demand dry cleaning rather than washing are irrelevant in categorising such expenditure.
14. In the circumstances I find that the applicant has not sustained her objection and the decision under review is affirmed.