Deductions and expenses: Swimwear, Grooming (Hydrotherapy Assistant)

Whether above average expenditure on swimming costumes, wet suits, creams and shampoo/conditioners due to working in a chlorinated and heated pool is deductible under subsection 51(1) (Income Tax Assessment Act 1936 (ITAA 1936))?

The expenditure on swimming costumes, wet suits, creams and shampoo/conditioners is deductible.

A taxpayer is employed as a hydrotherapy assistant and spends most of the working day immersed in a heavily chlorinated and heated swimming pool helping patients. Due to the chlorination, the taxpayer's swimming costume is replaced every 3 to 4 weeks and the taxpayer wears a wet suit for protection. The chlorine and heat also affects the taxpayer's skin and hair. The taxpayer is consequently required to use abnormally large quantities of creams and shampoo/conditioners.

Generally, expenditure on clothing and facial and grooming expenses is treated as private expenditure and therefore not deductible under subsection 51(1) (ITAA 1936) ( Mansfield v FC of T 96 ATC 4001; 31 ATR 367, FC of T v Edwards 94 ATC 4255; 28 ATR 87). There are, however, certain circumstances under which expenditure on conventional clothing, creams and hair moisturisers is deductible, provided that the requirements of subsection 51(1) (ITAA 1936) are met.

To be deductible under the first limb of subsection 51(1) (ITAA 1936), the expenditure must have the essential character of an outgoing incurred in gaining assessable income or, in other words, of an income producing expense ( Lunney v FC of T (1958) 100 CLR 478). Furthermore, there must be a nexus between the outgoing and the assessable income so that the outgoing is incidental and relevant to the gaining of assessable income ( Ronpibon Tin N. L. v FC of T (1949) 78 CLR 47). It is not sufficient that the expenditure is a prerequisite to the derivation of assessable income. It must contribute to the derivation of that income.

As the cost incurred by the taxpayer in replacing swimwear is a direct consequence of the high levels of chlorine and heat in the swimming pool, a sufficient connection between the expenditure on the swimwear and the activity by which the taxpayer earns income exists.

The wet suit is worn as protection against dehydration and skin infection caused by being immersed in the heavily chlorinated and heated pool for lengthy periods. Items of clothing will be deductible where the wearing of such an item is necessary to protect the taxpayer from above average risk of physical injury in carrying out the requirements of the taxpayer's occupation or is necessary to enable the taxpayer physically to perform such requirements ( Case A45 69 ATC 270; 15 CTBR (NS) Case 24 , Case V79 88 ATC 550; AAT Case 4353 19 ATR 3504). As the wet suit is used principally for income producing purposes and is used to provide protection against the harsh conditions of working in a hydrotherapy pool, a sufficient connection between the expenditure on the wet suit and the activities by which the taxpayer earns income is established.

The decision in Mansfield v FC of T 96 ATC 4001; 31 ATR 367 confirms that expenditure on facial and grooming expenses is essentially of a non-deductible private nature. Taxation Ruling TR 96/17 (Income tax: work related expense: deductibility of expenses on rehydrating moisturiser and rehydrating hair conditioner) states that a deduction for expenditure on facial and grooming products is only allowed where the expenditure is incurred where the taxpayer is subjected to harsh working conditions and must be well groomed.

A stated requirement of the taxpayer's employment is that the taxpayer's skin remains healthy of diseases and infections. The taxpayer uses creams and shampoo/conditioners to combat the drying effect of being immersed in highly chlorinated and heated pools and to treat fungal skin diseases. Therefore the nexus between the expenditure and the taxpayer's income producing activity is established and the expense is deductible.