The Treasurer has announced 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”. 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”.
Source: Treasurer’s media release No 048, 13 April 2013
[LTN 70, 15/4/13]
[FJM Note: Initially the ‘squawking’ was about the effect of this on MBA’s until it was pointed out that this is usually capital expenditure (to change careers) and the expenditure is not deductible in the first place. However, this still left plenty of non-capital (deductible) expenditure that would be subject to this cap (if it is ever enacted). For instance, every one semester subject in an LLM, which is frequently studied by graduates to further their career in tax, is well over this $2k limit, and a real concern to applicable universities. Likewise, the total cost of attending most interstate conferences organised by the likes of the Tax Institute, will be typically be more than this limit. A tax practitioner will frequently spend much more than this limit in a year. This is very dubious policy, which we can hope will never be implemented.]