Private ruling: Deduction - self-education
Date of advice: 24 May 2023
Published: 10 July 2023
Ruling period: Financial year ending 30 June 20XX | Financial year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to a partial deduction for command treats, vet bills and grooming for your companion dog? | A1: Yes, to the extent that the dog is used for the purpose of producing your assessable income. Therefore, under Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997), you are able to partially deduct expenses for command treats, vet bills and grooming. Any allowable deductions will need to be apportioned. The deductible proportion can be calculated by taking into account the number of hours for which the dog is actively engaged while working with your clients, versus the balance of the time during the week when it is not being used by you to assist with your work activities. Time spent at home in a private setting (not working) and times not being used by you for your work activities would not count towards a taxable use component. You will need to maintain records, including a diary or logbook, to enable you to calculate the appropriate apportionment for the deduction. | Q2: Are you entitled to a deduction for respite stays and toys for your companion dog? | A2: No. Respite stays and toys for a dog are not deductible as they have the characteristics of a private expense. In these circumstances, it is considered that the respite stays and toy costs are not a work-related expense and therefore not deductible under Section 8-1 of the ITAA 1997. They are considered predominately private or domestic expenses.

Relevant facts and circumstances: You work as a sole trader. You have made a self-assessed determination that your income is Personal Service Income (PSI). You started your work in XXXX. Your dog has gone through extensive training to be a fully qualified companion dog to help you aid in assisting with your clients at a higher level. You and your dog attended eight companion dog training sessions at XXXX between XXXX and XXXX. You currently have a total of XX clients. You use the dog when working with XX specific clients. The dog provides companionship-controlled behaviour therapy, weight therapy and provides ease and comfort with the XX specific clients. You use the dog for XX hours in total per week with your XX clients. You currently work a total of approximately XX hours per week (some weeks vary depending on client needs). To work in your field you have obtained the relevant insurance, certificates and qualifications. Your dog will be kept at home. You are seeking to claim expenses including vet bills, command treats and grooming, respite stays and toys. You have provided a letter from the dog training organisation that outlines the specialised skills and outcomes that you and your dog have learnt.

Relevant legislative provisions: Section 8-1 of the Income Tax Assessment Act 1997