In a recent ATO media release entitled "Pull up your socks, but don't claim them", Assistant Commissioner Kath Anderson has said: “We have seen claims for clothing and laundry expenses increase around 20 per cent over the last five years. While this increase isn’t a sign that all of these taxpayers are doing the wrong thing, it is giving us a reason to pay extra attention.”
It is important to know what you are eligible to claim in the way of clothing and laundry expenses, and you must be able to explain the basis for how these claims were calculated.
Here are a few points that may be helpful to you:
In order for clothing or shoes to be deductible they must either be part of a compulsory uniform, provide protection, or have other attributes and qualities that clearly identify you as being associated with an employer/organisation or holding a particular occupation.
For example, you are unable to claim a deduction for general workwear such as jeans, drill shirts, shorts, trousers, socks, stockings or closed shoes as they are not regarded as protective clothing if they lack protective qualities designed for the risks of your work. This includes where you might have closed shoes to protect your feet such as sneakers or leather shoes.
You also cannot claim the cost of purchasing or cleaning clothes you may be required to wear in combination but are not part of a complulsory and distinctive uniform, such as in the example of a bartender would be required to wear black trousers and white shirt, or pantyhose and a suit.
If you embroider a logo into a shirt or hat, it may be deductible as a non-compulsory uniform only if you are required to wear it AND the logo is registered with AusIndustry. However, if the logo is not registered with AusIndustry it will not be deductible. A non-compulsory uniform will never include shoes, socks or stockings or a single item such as a jumper.
Ms Anderson said common mistakes the ATO has seen include people claiming ineligible clothing, claiming for something without having spent the money, and not being able to explain the basis for how the claim was calculated.
Our checklist allows clients to more accurately account for expenditures and them to record and calculate
Reference: ATO media release - "Pull up your socks, but don't claim them", 19 July 2017