The Budget Papers confirmed the Treasurer’s 13 April 2013 announcement (see April 2013 Developments) that the Government would introduce a $2,000 cap on tax deduction claims for work-related self-education expenses per person from 1 July 2014. The announcement was made “as part of a package of reforms to make a down-payment on the National Plan for School Improvement”.
Taxpayers will be able to claim a tax deduction of up to $2,000 of education expenses in an income year. Deductible education expenses are costs incurred in undertaking a course of study or other education activity, such as conferences and workshops, and include tuition fees, registration fees, student amenity fees, textbooks, professional and trade journals, travel and accommodation expenses, computer expenses and stationery, where these expenses are incurred in the production of the taxpayer’s current assessable income.
Source: Budget Paper No 2 [p 30]
In his April announcement, Mr Swan said that without a cap, “it’s possible to make large claims for expenses such as first class airfares, 5-star accommodation and expensive courses”. However, Mr Swan said “the majority of those with self-education expenses will not be affected by this change”. He said the Government “will consult closely with employees and employers to better target this concession while still supporting essential training”. The Budget Papers advised that a discussion paper will be released in late May 2013 as part of this process of consultation. Further, Mr Swan said the Government would retain the current treatment that employers are not liable to FBT for education and training they provide to their employees, unless an employee salary sacrifices to obtain these benefits.
[WTB 20, 14/5/13]
[FJM Note: Treasury issued a discussion paper on this on Friday 31 May 2013 – see next Month’s developments.]