Clothing - the abnormal expenditure test

Clothing - the abnormal expenditure test

 A deduction may be allowed for clothes, which are not 'necessary or peculiar'.

Where the taxpayer's occupation imposes a recognised obligation to provide a wardrobe which might be regarded as 'in excess' of normal, everyday requirements...

Or where the duties of the occupation result in the need for the clothing to be replaced more frequently than normal

In other words, expenditure will be abnormal when because of the job

You need more clothes than others do

You must replace them more often

Mannequins/models would accumulate clothing and accessories beyond their ordinary requirements - they would need more clothes than others

 

So will television newsreaders, but they will also have to replace their clothes more often due to make - up stains, etc - so they would fit both categories of abnormal expenditure

A plain clothes police officer will have to replace his suits frequently due to wear and tear - category

Answer this question....

The personal secretary to the wife of the Governor of Queensland, claims a deduction for additional expenditure on clothing over and above the average of previous years. She argues that because her employment requires attendance upon her employer at all public engagements, and she is often required to change attire several times a day, the additional expenditure in incurred in gaining income Is a deduction allowable?. 

Yes No

 

The full Federal Court thought so in FCT v Edwards (1994) 28 ATR 87.Refer CCH Master Tax Guide 14-180. But don't get too ambitious about making such claims. The Commissioner expressed his reluctance to allow such deductions to general taxpayers in ruling TR 94/22

Answer this question....

 Would the following constitute abnormal expenditure on clothes? Female office worker - cost of replacing stockings ruined by contact with office furniture

Yes No

 

The appeals tribunals have not been prepared to accept this as abnormal expenditure

Answer this question....

Would this amount to abnormal expenditure on clothes bus driver ruins shoes changing tyres and by contact with dieseline on the garage floor 

Yes No

 

This would amount to abnormal expenditure

 

While some of the tribunal decisions may seem to apply these tests in a more rigorous way than others, if you can show that

Outgoings on clothing are incurred as a result of requirements by the employer,

Or because of the conditions under which the duties are performed

Then grounds would exist for making a claim - refer CCH Master Tax Guide - para 14-180

For example, a steel - worker was refused a claim for the cost of washing clothes impregnated with grease and oil separately from the rest of the family wash by the board - even though the Commissioner had allowed a claim of $30

Answer this question....

Sec 8-1 allows a deduction for the cost of the clothes you wear to work 

Yes No

 

It would not usually said that the cost of clothes was an expense incurred in gaining income. It is a prerequisite to gaining the income

Answer this question....

a bank accountant claims a deduction for the cost of 2 suits, which he would not have purchased if he did not work for the bank. Is a deduction allowable? 

Yes No

 

The suits would be neither 'necessary & peculiar' nor 'abnormal expenditure'

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