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Self-education deductions for presentation skills

Posted by Northadvisory on September 27, 2017

Self-education expenses are deductible where the expenses have the necessary connection with the production of the taxpayer’s assessable income. However, a deduction will be denied for the first $250 of certain kinds of self-education expenses.

Examples of these expenses include tuition fees, textbooks, and travel and living expenses incurred in attending conferences, seminars or educational institutions.

The Commissioner of Taxation takes a position that self-education course fees should be deductible for a “prescribed course of education”.

A recent Private Binding Ruling demonstrates that the ATO is not as strict as this when it comes to self-education expenses. Even though a taxpayer must show that the course relates to their current employment or a promotion, the scope of this is substance-based.

In the Private Binding Ruling, the taxpayer was able to claim a deduction for a course fee relating to enhancing the ability of public speaking and presenting. In their current role, they were required to make regular presentations either to management or to external clients for various products and services.

The taxpayer had received feedback from management that their presentation skills needed improvement. The employee responded by beginning a program that assisted them in this skill. The Commissioner allowed this as a deduction in the year incurred, as improvement in their current role was necessary.

If the study of a subject of self-education objectively leads to, or is likely to lead to an increase in a taxpayer’s income from his/her current income-earning activities in the future, a deduction is allowable.

Generally, courses may be deductible in the ordinary course of business if they are provided to the staff as a whole. This ruling in particular provides an understanding that educational staff expenses can be personalised for key members of staff without attracting any fringe benefits implications.

If you have questions, please do not hesitate to contact us.

Martin van der Saag
Director
T: 02 9984 7774
E: martinv@northadvisory.com.au

Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au