Private ruling: Deductibility of work-related expenses
Date of advice: 28 August 2025
Published: 13 October 2025
Ruling period: Year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Are you entitled to a deduction for the cost of XXXX and accessories? | A1: No. | Q2: Are you entitled to a deduction for the cost of attending public XXXX? | A2: No.

Relevant facts and circumstances: Background You are employed by a company (the employer). The employer works on contract to a client (the client). Your job description You are a project manager for the employer. As the project manager for the employer, you are required to oversee and ensure the successful assessment and delivery of a portion of a development program. Your roles and responsibilities You don't have an assigned position description (PD) with the employer as the project managers' roles vary greatly depending on the project they are working on and their expertise. Key Responsibilities include: • Leading project planning sessions, developing and executing project plans through the day-to-day management of relevant contractual documents specifically the contracted statement of work. • Provide support as required at the program level to aid in the review and/or development of contract documents. • Overseeing all incoming and outgoing project documentation. • Managing project progress and adapting work tasks as required. • Oversee effort and ensure testing protocols meet the client's standards. • Plan, conduct, and oversee accuracy and precision testing to evaluate system performance under varied operational conditions. • Provide expert recommendations based on testing outcomes. • Maintain personal xxxx and technical proficiency to effectively conduct evaluations. • Managing relationships with both internal and external clients, suppliers and stakeholders. • Provide training to the client's participants. • Coordinate internal resources and external third parties in the execution of project tasks. • Conducting project review and creating detailed reports for management. • Manage changes to the project scope, project schedule and project budgets. • Report and escalate risks and issues to management as needed. • Track project performance, specifically to analyse the successful completion of short and long-term goals. • Identify, establish and maintain clear lines of communication and reporting processes with staff members, customers and other stakeholders. • Participating as required in the employer business capture/sale process i.e. reviews, development of solutions and tender submission. Maintain personal xxxx and technical proficiency Your expertise is critical in overseeing the evaluation and implementation of the project. You maintain your expertise through regular training. You have personally purchased XXXX and accessories for professional training to maintain your personal XXXX and technical proficiency. You frequently (X times per month) travel to public XXXX for ongoing training. You participate in XXXX competitions once every X months as required to maintain your XXXX licence. During your first few years with the employer there was no issue, and you only recently discharged XXXX. Over the last two years, you have been required to undertake training at the local xxx due to no longer having access to specialised training, xxxx and xxxx. You complete your training in your own time and at your own cost. You have a letter of support from the employer which states their expectation that you will maintain your skills to enable you to continue to provide the best advice to the client. The XXXX used in your role cannot be borrowed or provided by the client and used on public XXXX. Subsequently, you must privately purchase suitable XXXX that can be used on public xxxx. You use your training in your day-to-day role as project manager. Using the XXXX recreationally You use the XXXX recreationally for XXXX training.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 40-25

Reasons for decision: Summary: You are not entitled to a deduction for the cost of XXXX and accessories because they are private expenses. | Detailed Reasoning - Question 2: Are you entitled to a deduction for the cost of attending public XXXX? | Summary: You are not entitled to a deduction for the cost of attending public XXXX because they are private expenses. | Detailed Reasoning - Detailed reasoning: 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. However, outgoings of a capital, private or domestic nature are not deductible. Taxation Ruling TR 2020/1 Income tax: employees: deductions for work expenses under section 8-1 of the Income Tax Assessment Act 1997 explains when an employee can claim a deduction for work-related expenses. Of particular relevance to your situation are paragraphs 13 and 14 of TR 2020/1: In gaining or producing assessable income. The key element of section 8-1 for work expenses is the requirement that expenses be incurred 'in gaining or producing assessable income'. These words are to be understood as meaning incurred 'in the course of' gaining or producing assessable income, and do not convey the meaning of outgoings incurred 'in connection with' or 'for the purpose' of deriving assessable income. Further, the meaning of 'in the course of' gaining or producing income means it is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of the assessable income. Also, of relevance in determining if an expense is incurred in gaining or producing assessable income, is the level of direction and control exercised by the employer over the employee in the conduct of their employment, including any training activities. Paragraph 67 of TR 2021/1 states: ...It is important to consider direction and control in the overall context of the facts and circumstances of each case, because direction and control alone is not sufficient to establish the relevant connection with employment. The need to be under the direction and control must be explained by the duties of employment. | Detailed Reasoning - Application to your circumstances: In your case, you purchased XXXX, accessories, and attended public XXXX as you are required to maintain personal XXXX and technical proficiency in your role. We acknowledge that you incurred the expenses in connection with or for the purpose of deriving assessable income. However, to be deductible, they must also be incurred 'in the course of' gaining or producing your assessable income. In your case, the expenses do not have the necessary connection to your income earning activity. Your training occurs outside the place and time of your employment. Although your employer requires you to maintain your personal XXXX and technical proficiency, they do not exercise any direction and control over your training. We note that maintaining your XXXX licence requires you to participate in a minimum number of competitions. However, costs associated with these competitions are also private expenses. The required connection between the expenses and your employment does not exist. Therefore, the costs incurred are private expenses. You are not entitled to a deduction for the cost of XXXX, accessories, or attending public XXXX under section 8-1 of the ITAA 1997.