Private ruling: Deductibility of expenses
Published: July 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 01 July 2011

Ruling: Q1: Can you claim a deduction for the costs incurred to undertake voice coaching, as a work related expense? | A1: No.

Relevant facts and circumstances: You are an employee. In your work you are required to use your voice for long periods. Due to the nature of the work you were having issues with your voice. You received vocal coaching, through a qualified teacher, so that you could continue working in your current position. The technique used assisted you to speak without the unnecessary tension in your body, particularly your neck. You have received some remuneration from your health fund for attending these sessions.

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. The courts have considered the meaning of 'incurred in gaining or producing assessable income'. In Ronpibon Tin NL Tong Kah Compound NL v. Federal Commissioner of Taxation (1949) 78 CLR 47; 56 ALR 785; 8 ATD 431 the High Court stated that: For expenditure to form an allowable deduction as an outgoing incurred in gaining or producing assessable income it must be incidental and relevant to that end. The words "incurred in gaining or producing the assessable income" mean in the course of gaining or producing such income. In your case, you were having issues with your voice due to the nature of the work. To overcome this problem you received vocal coaching through a qualified teacher. Whilst we accept that without the vocal coaching you may not have been able to continue working as a call centre operator, medical expenses have no direct connection to the gaining or producing of assessable income. The purpose of this expense is to allow you to return to good health. Accordingly, there is an insufficient connection to the gaining or production of assessable income for a deduction to be allowed. In addition, medical expenses can be characterised as being of a private nature and therefore can also be excluded on that ground. Therefore you cannot claim a deduction for the vocal coaching expenses, under section 8-1 of the ITAA 1997.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.