Private ruling: Work related expenses - Obtaining a manual licence
Published: November 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to a deduction for the expenses incurred in obtaining your manual driver's licence? | A1: No.


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 have incurred expenses to obtain a licence to drive a manual vehicle. The cost of the lessons relates to the entitlement to drive a manual vehicle on public roads. The expenses associated with obtaining your manual licence, including driving lessons and tests are considered to be private in nature. Therefore, you are not entitled to a deduction.

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. | Relevant facts: A large part of your employment involves field work. | The company you work for has manual four wheel drive vehicles that are used for this field work. | You held a restricted automatic licence. | It is a requirement in your state that you must re-sit and pass a practical driving test in a manual vehicle to remove the automatic licence restriction. | You have incurred expenses in undertaking driving lessons and testing; you have provided copies of these receipts.