Deductions: swimming instructor (swimwear)

Is expenditure incurred by a swimming instructor in purchasing swimwear deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)?

No. Expenditure incurred by the taxpayer in purchasing swimwear is not deductible under section 8-1 of the ITAA 1997.

The taxpayer works as a part-time swimming instructor. The taxpayer purchases swimsuits every six to eight weeks as a result of the damaging effect of the chlorinated swimming pool water on the swimsuits.

Generally, expenditure on conventional clothing is treated as private expenditure and therefore not deductible under section 8-1 of the ITAA 1997 ( Mansfield v. FC of T 96 ATC 4001; (1996) 31 ATR 367 (Mansfield); Federal Commissioner of Taxation v. Edwards (1994) 49 FCR 318; 94 ATC 4255; (1994) 28 ATR 87 (Edwards)).

To be deductible under section 8-1 of the ITAA 1997, 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. Federal Commissioner of Taxation (1958) 100 CLR 478). It is not sufficient that the expenditure is a prerequisite to the derivation of assessable income ( Lodge v. Federal Commissioner of Taxation (1972) 128 CLR 171; 72 ATC 4174; (1972) 3 ATR 254; Federal Commissioner of Taxation v. Cooper (1991) 29 FCR 177; 91 ATC 4396; (1991) 21 ATR 1616)

In Edwards , the taxpayer was required to wear multiple outfits in one day due to the nature of her work as an attendant to the governor's wife. The Court held that the first outfit for the day satisfied the taxpayer's requirements of modesty, decency and warmth and was private in nature, and that additional clothing worn during the day solely served work-related purposes to allow the taxpayer to carry out her duties. Expenditure on the additional clothing therefore had the necessary nexus to the activities by which the taxpayer produced her assessable income and was deductible.

In Mansfield , Hill J found that expenditure by a flight attendant on cabin shoes and hosiery which were items of conventional clothing was deductible. Hill J took a number of matters into account, but important to his decision was that the taxpayer had purchased the cabin shoes for use solely in flight and the shoes were unsuitable for ordinary use as they were a half-size too large to allow for the swelling of the taxpayer's feet in flight. The hosiery was found to be deductible on the basis that it formed part of the taxpayer's uniform and was thus differentiated from ordinary clothing.

In the present case, the taxpayer wears a single swimsuit at work which meets the requirements of modesty and decency. Although specialised, the clothing is conventional clothing. There is nothing to distinguish the swimsuit from that used for private purposes such as training or recreation.

There is no principle that expenditure incurred in replacing clothing worn out during the course of income-earning activities is deductible where the clothing serves a private purpose.