Reasonable Business Expense - The Chartered Institute of Taxation

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Reasonable Business Expenses: Discussion papertravel expenses. 243 Where an employee uses a vehicle provided by theemployer and the employee does not incur any running costs, or theemployee 244 makes private use of the vehicle, then no deductions for anyassociated expenses may be made. 245 The rules also provide deductibilityfor apparel such as protective clothing, 246 occupational clothing, 247compulsory uniforms 248 and a single piece of distinctive clothing 249 , wearof which is compulsory. Non-compulsory clothing and items of acorporate wardrobe must be registered 250 for the associated costs to bedeductible. 251Similar rules 252 apply for journalists; 253 however, these take into accountthe peculiar nature of their employment. Special allowances are providedfor motor vehicles, travel, overnight meals and telephone expenses. 254Apportionment is allowed as regards mixed purpose expenses such that243244245246247248249250251252253254Where, for instance, the travel is between two separate workplaces,between a workplace and an alternative place of work (e.g. the law courts)or another business location. Costs of normal travel between the home andthe office is disallowed except where the transport of bulky work relatedequipment is involved, home is the base of the employment and travel is toa workplace or an alternative work location (e.g., the law courts). Traveloutside normal work hours or due to unavailability of public transport ishowever non-deductible: ibid, p. 4.Or indeed, his relative: see §51AG Income Tax Assessment Act 1936.“Lawyers 2005”, by the Australian Tax Office, Canberra, May 2005, p. 4.See Australian Tax Office’s Tax Ruling TR 2003/16 – Deductibility ofProtective Clothing.Items easily associated by the public with a particular profession such as abarrister’s gown.Including distinctive shoes, socks and stockings.Essentially apparel to which the employer’s logo is permanently attachedand is not generally available to members of the public.See ITAA 1936.Note that laundry and maintenance costs are also allowed, with evidence ofexpenses required if certain sums are exceeded: see generally “Lawyers2005”, by the Australian Tax Office, Canberra, May 2005, p. 6.For instance, as regards reimbursements and fringe benefits.See Australian Tax Office’s Tax Ruling TR 95/20 – Employee Journalists –Allowances, Reimbursements and Work-related Expenses; see also“Journalists 2005”, by the Australian Tax Office, Canberra, May 2005,available at http://www.ato.gov.au/content/downloads/NAT2782-05.pdf.Ibid, p. 3. The rules for deductibility costs for work-work/home-work travel isidentical to that for legal employees: see footnote 243 above.Bode OyetundePage 48 of 63PhD CandidateCentre for Commercial Law StudiesQueen Mary & Westfield College
Reasonable Business Expenses: Discussion paperwork-related expenses are deductible. 255 Childcare expenses, which areconsidered to be private, are non-deductible. 256 Certain expenses incurredvis-à-vis private study/home offices are deductible to the extent thatthey relate to the costs of running an income-generating office at home 257and not to the general home overheads. 258 Expenses incurred onnewspapers and magazines on the one hand, and technical/professionaljournals on the other, are deductible provided these periodicals are usedby an employed journalist in researching a topic and are connected withthe employment in that capacity respectively. 259 Similarly, where ajournalist is required under his employment contract to access paidtelevision channels, an apportionment is allowed and the work-relatedaspects of the costs can be deducted. 260 The tax regulations permitdeductions for attendance at employment-connected events includingseminars, conferences, training programmes and even social gatheringswhere the journalist attends in an official, work-orientated capacity. 261Even the costs of sunglasses, sunhats and sunscreens are deductible. 262Full deductibility is permitted for work-related telephone expenses;where there is a dual use, the bills for calls may be dissected and theeven rental charges apportioned between work-related and privatepurposes, such that the expenses attributable to work purposes aredeductible. 263255256257258259260261262263Ibid, p. 3.Ibid, p. 8.These include reduction on value of home office equipment, repairs tofurniture and fittings, and heating, cooling and lightning expenses: ibid, p. 9.Such as general rent and rates, mortgage interest and house insurancepremiums: ibid, p. 3. Detailed records must be kept as evidence in supportof claims for deductions: see the Australian Tax Office’s Practice StatementPS LA 2001/6 – Home Office Expenses: Dairies of Use and Calculation ofHome Office Expense.“Journalists 2005”, by the Australian Tax Office, Canberra, May 2005, pp. 9– 10.Ibid, p. 10.Ibid, p. 10.Where the journalist works in the sun for long periods of time and requiressuch protective gear: ibid, p. 10.Ibid, p. 10.Bode OyetundePage 49 of 63PhD CandidateCentre for Commercial Law StudiesQueen Mary & Westfield College
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Reasonable Business Expense - The Chartered Institute of Taxation

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