Private ruling: Work related expenses
Published: February 2014
Ruling period: Year ending 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for the cost of the following expenses? · shoes · Prescription lenses · Eye operation · Orthopaedic inner soles | A1: No | Q2: Are you entitled to a deduction for the cost of your tools and parking expenses? | A2: Yes | Q3: Are you entitled to a deduction for a portion of the cost of your prescription sun glasses, attributable to earning your assessable income? | A3: Yes


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 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. Walking shoes The shoes you purchased fall within the category of casual shoes and are of a type worn by a large portion of the general public for various reasons. The shoes do not form part of a compulsory uniform nor are they part of a non-compulsory uniform. The shoes are neither manufactured as protective footwear nor sold as protective footwear. Therefore, the distinction to be made is between someone who must wear the footwear so as to be able to perform his or her duties without serious risk of injury and someone who merely wears those shoes because they find them comfortable, convenient or appropriate. A deduction is not allowable for the cost of conventional footwear such as running shoes, sports shoes and casual shoes, as it is not considered to be protective. We consider that the cost of this footwear is a private expense and is not an allowable deduction. Eye surgery/ Orthopaedic inner soles/ Prescription lenses Medical expenses have no direct connection to the gaining or producing of assessable income. The purpose of the expense is to return the taxpayer to health. There is insufficient connection to the gaining or production of assessable income for a deduction to be allowed as the expenditure is too remote. In addition, medical expenses are private in nature and therefore can also be excluded on that ground. Although a taxpayer might be unable to earn assessable income without the aid of an appliance, the outlay on the appliance is not incurred in gaining the assessable income but rather is incurred to help overcome a disability suffered by the taxpayer. In your case, you had eye surgery. You need to be able to see to undertake and complete your work duties. Disorders of the eye are considered a medical condition. The eye surgery, prescription glasses and orthopaedic soles are to overcome a personal medical condition and therefore are not an allowable deduction. Parking expenses A deduction is allowable for parking fees (but not fines) and tolls if the expense is incurred while travelling: · between two separate places of work or · in the normal course of duty and the travelling expenses are allowable deductions. In your case, you are required to perform a set quota of tasks per day so that may involve areas in the CBD or the suburbs. You incur parking expenses as you need to park the vehicle close to these areas in the CBD. You are entitled to claim a deduction for the parking fees as they are incurred in the normal course of duty. Tools A deduction is allowed for the cost of purchasing tools which are necessary for your work. In your case you have purchased a tool which you use for a specific purpose when working. Therefore, the cost of purchasing the tool is an allowable deduction. Prescription sunglasses Paragraphs 35 and 36 of Taxation Ruling TR 2003/16, which discusses the deductibility of protective items, states that expenditure on items you use to protect yourself against the risk of illness or injury is private or domestic in nature if it is incurred merely as part of your normal personal requirements. For instance, you cannot claim a deduction for the cost of prescription glasses to protect yourself against the risk of injury where the risk arises only because of your short-sightedness. However, expenditure on prescription sunglasses, including photochromic glasses which have filtering and glare reducing qualities similar to sunglasses which protect you from the risk of illness or injury at work is not of a private or domestic nature. In your case you have purchased a pair of prescription sunglasses. It is reasonable to expect that as you work solely outdoors, that the duties of your job require you to be exposed to the sun and protection from glare and the sun's rays is required. Therefore, the cost of your prescription glasses is an allowable deduction. However, you must apportion the expenditure on protective items which you also use partly for private or domestic purposes. Therefore, you can only claim a deduction for the portion of the expenditure attributable to earning your assessable income.

Relevant facts: You work in a particular occupation. | Your employer provides you with the use of a vehicle for work purposes. | Your employer pays for some costs but does not pay for the cost of parking expenses. | You are expected to undertake a quota of tasks per day so this may involve areas in the CBD or the suburbs. | You incur parking expenses as you need to park in the CBD. | You use a particular tool in carrying out your work. | You require glasses to be able to read and have recently had your eye prescription changed, so you had new lenses put in your frames. | You get prescription sun glasses made up as you work outdoors and you are exposed to the sun, rain and winds. | To cover your poor eyesight you have had eye surgery performed. | You go through a few pairs of shoes each year and also buy orthopaedic inner soles for your shoes.