Joubert and Commissioner of Taxation [2020] AATA 2645
Think carefully about dodgy work related expenses claims. For example, can I claim the noise cancelling earphones used for zoom conference and phone calls in a busy home with three people WFH during Melbourne iso?
Facts
The taxpayer was employed as an electronics technician in the Navy. He also performed other duties, including as a fitness instructor. In 2017, he claimed deductions for: work-related clothing, an HDMI splitter box and splitter hub, gym fitness equipment, polarised glasses, a tablet and a scientific calculator.
To support the deduction for work-related clothing, the taxpayer provided a transaction report from a recognised supplier of naval uniforms. The Commissioner said that the report did not identify the specific items purchased nor the corresponding amounts. To support the deduction for other work-related expenses, the taxpayer provided online purchase orders mostly, from eBay.
The taxpayer argued that these items were necessary to perform his duties on-board the naval ship .. the HDMI splitter and hub improved his training presentations; the gym/ fitness equipment helped in his role as a fitness instructor; the tablet stored books and engineering works; the scientific calculator helped him to perform his duties as an electronics technician; and the polarised lenses helped him see things in the water.
The Commissioner argued these items were discretionary expenses and not at the direction of the Navy and there was insufficient nexus with the gaining or producing of the taxpayer’s assessable income.
Decision
The AAT held that the expenses claimed by the taxpayer were not necessary to earning his assessable income.
Further: the transaction report from the clothing store did not sufficiently identify what was purchased and the price paid. The expenditure on the HDMI box splitter, the splitter hub and the gym/fitness equipment was akin to the taxpayer providing a benefit to the Navy and his fellow sailors rather than being in the course of producing his assessable income because he would have continued to be paid for his duties if he had not purchased and supplied those items. There was little evidence as to how the tablet and the scientific calculator were necessary for his role. Finally, even though the polarised glasses were beneficial, the expense was not directly related to producing the taxpayer’s income.