Private ruling: Police check
Date of advice: 11 August 2017
Published: November 2017
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled to a deduction for the costs associated with obtaining a police check? | 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 states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income. You cannot claim a deduction if the loss or outgoing is of a capital, private or domestic nature. For a deduction to be allowed there must be sufficient nexus between the loss or outgoing and the assessable income. The expense must give rise to or help produce assessable income for it to be deductible. In TD 93/112 the Commissioner adopted the reasoning of Hill J in FC of T v Cooper (1990) 21 ATR 525; 90 ATC 4580, in that an employer’s requirement that an employee incur expenditure which is not related to the income-producing activities of that employee, does not convert the expenditure into a deductible outgoing. In your case you were required to have a Police check prior to commencing employment. As the police check was conducted before you began your employment, the expense is an outgoing that precedes the earning of assessable income. It is not an expense incurred in the course of gaining assessable income. The expense is therefore not deductible.

Relevant facts: You were required to have a police check prior to being employed. | You were not reimbursed for the costs associated with the Police check.