Private ruling: Deduction for drivers licence
Published: April 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 01 July 2011

Ruling: Q1: Are you entitled to a deduction for the expenses incurred in obtaining your heavy rigid (HR) driver's licence? | A1: No

Relevant facts and circumstances: You work for your employer as a technician and your duties involve operating a variety of fixed plant, hygiene duties and government testing. Your work site is a product receiving, storage and distribution centre, and on site there is a truck and a front-end loader. Your employer is encouraging staff to obtain a HR licence to enable them to operate these machines. With a HR licence you will be advanced to a higher pay scale. After you obtain a HR licence you will be working at the same site and you also will be able to operate the truck and front end loader when required. Your employer advised that if you did not obtain this licence you could not drive the truck and front end loader and this would result in you remaining at your current pay scale. You would learn to drive trucks and the costs incurred would be for a learner's permit and for approximately 12 hours of lessons.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1

Reasons for decision: Summary: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 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, or relate to the earning of exempt income. Taxation Ruling TR 95/18 states that a deduction is not allowable for the cost of obtaining or renewing a driver's licence as it is a private expense. Paragraph 77 of TR 95/18 explains that while the holding of a drivers licence may be a condition of employment, it does not follow that the licence fees are deductible. This principle is confirmed in Taxation Determination TD 93/108. In Case R49 84 ATC 387; 27 CTBR(NS) Case 104 , it was held that even though travel was an essential element of the work to be performed by the taxpayer, a driver's licence was still an expense that was private in nature and the cost was not an allowable deduction. As the cost of the licence is private in nature it follows that any expense associated in obtaining the licence such as driving lessons, is also considered to be a private expense. In your case, you are incurring expenses to obtain a licence to drive HR vehicles. These costs relate to your entitlement to drive HR vehicles at your worksite. The expenses associated with obtaining your HR licence, including driving lessons and tests are considered to be private in nature. Therefore, you are not entitled to a deduction.

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