Review of tax deduction rules for non-compulsory uniform expenses
The government has released a consultation paper on its review of the tax deduction rules for non-compulsory uniform expenses.
Division 34 of ITAA 1997 provides that employees can only claim a tax deduction for non-compulsory uniform expenses, where employers have the uniform designs approved and entered on the Register of Approved Occupational Clothing by the Secretary of the Department of Industry, Innovation and Science. The review will consider whether the current approach is the most efficient and effective way of addressing the concern that taxpayers might claim tax deductions for private or domestic expenditure on conventional clothing worn to work, but that is not a non-compulsory uniform as such.
The closing date for submissions is 16 December, 2016. Written submissions may be sent to: Manager, Regulatory Reform Unit, The Treasury, Langton Crescent, PARKES ACT 2600; email: regulatoryreform@treasury.gov.au.
Please feel free to call Norman Ruan or Martin van der Saag on 02 9984 7774 if you have any questions.
“The government has released a consultation paper on its review of the tax deduction rules for non-compulsory uniform expenses.”
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Key Takeaways
A formal review has been launched into how non-compulsory uniform deductions are treated for tax purposes.
The consultation paper seeks to assess whether existing rules are appropriate and effective.
Current law limits non-compulsory uniform deductions to clothing entered on an approved register.
If uniforms are not registered, employees cannot claim the deduction even if the clothing is worn for work.
The review aims to address concerns about claimed deductions for everyday work clothes.
Authorities want to reduce incorrect claims where clothing is not genuinely distinct from regular wear.
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Frequently Asked Questions
What is the review about?
The review examines the current tax deduction rules for non-compulsory uniform expenses to see whether the existing approach is the most effective way to prevent inappropriate claims for ordinary work clothing.
Why are the rules for non-compulsory uniform deductions being reviewed?
The review was prompted by concerns that taxpayers might be claiming deductions for private or domestic expenditure on conventional clothing worn at work, which is not intended to be tax deductible.
What must happen under the current rules for a non-compulsory uniform to be deductible?
Employees can only claim a deduction if their employer’s non-compulsory uniform design is officially approved and registered on the relevant government register before the deduction can be claimed.
Who released the consultation paper on the review?
The federal government released the consultation paper, inviting submissions on possible changes to the deduction rules for non-compulsory uniforms.
Was there a deadline for submissions on the review?
Yes — submissions on the consultation paper were invited by a specified closing date, signalling the formal review process for potential law reform.
What is this review about?
The government released a consultation paper reviewing the tax deduction rules for non-compulsory uniform expenses.
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