Self-education deductions limited
Deloitte Federal Budget media releaseDOWNLOAD
14 May 2013: The Government has committed to limit self-education expenses to $2,000 per person per year.
The proposed measures will apply from 1 July 2014 to a broad range of education expenses including those incurred in undertaking conferences, workshops or other education activities such as short-term development courses.
Specific examples of education expenses previously given by the Government include formal qualifications, associated tuition fees, textbooks, stationery, travel expenses, conferences, seminars and self-organised study tours.
Deloitte Private Tax partner David Pring, is concerned that professionals seeking to improve their income earning capacity will be discouraged from doing so by the new rules.
“A blanket $2,000 cap for every taxpayer does not represent the educational needs of every taxpayer. There are many professions in which it is mandatory to complete yearly educational hours to maintain professional memberships. It is often not wholly by choice that these taxpayers attend the courses and conferences and it is not uncommon that such a single event will exceed the proposed $2,000 cap. The medical profession immediately comes to mind where it is imperative to stay up to date with the latest techniques and to qualify for specialties,” said Mr Pring.
“In addition to individual taxpayers, the measure could have an impact on educational providers such as the Universities. The Universities should be concerned with the impact on their postgraduate programs, such as the MBA program, that taxpayers have commonly undertaken to increase their learning capacity,” said Mr Pring.
“The government must have concerns on how taxpayers have been using these rules but any such concerns could be dealt with by a more targeted approach through tax office rulings for example,” added Mr Pring.