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  • Are police checks tax deductible?

    Disclaimer: The information below is general and does not constitute financial or taxation advice. This information should not be relied upon to determine your taxation requirements in lieu of professional advice. Where there is any doubt or confusion, you should consult a registered tax accountant.

    There are a lot of expenses people make as individuals or employees of an organisation, hoping they will be tax-deductible. While some of these costs are tax-deductible, others are nothing but a misunderstanding of the Australian Tax Laws and other policies.

    Of course, it is always good to get a tax deduction on your purchases to reduce the strain on your income and get you better financial credits. In some circumstances, Police Checks can be tax-deductible whilst in other circumstances, they are not considered a valid tax deduction. The article below further explains in more detail the circumstances that Nationally Coordinated Criminal History Checks can be tax deductible.

    What determines if a Police Check is tax-deductible?

    Not all cases of paying for your Police Check can result in a tax deduction, and it must meet specific criteria. Also, not all expenses you make for a Police Check can qualify for a tax deduction.

    Some of the expenses in a Police Check are considered personal.

    Police Checks can be tax-deductible if the Check was applied while you were receiving an income based on the Check.

    Applying for a Police Check as a prerequisite for a job?

    Many applicants seeking a job hope that their application for a Police Check is tax-deductible, but this is not. The laws consider such expense of a Police/Record Check "too soon" to be considered as a deduction and the fact that the individual does not have an income.

    It cannot be tax deductible if the candidate is not getting an income by the time they apply for the Police/Record Check.

    However, the expense can be tax deductible if the candidate is still getting paid in the role (e.g. they applied for a police check as a requirement of an existing ongoing job where they are earning an income).

    Applying for a Police Check as a current employee

    An applicant who applies for a Police/record Check while being an employee or still receiving income for that role can be eligible for a tax deduction.

    The first assessment metric for a tax deduction on an expense is if it was made while you are getting an income.

    What are the claims to get a tax deduction?

    There are about three essential rules when considering whether your expense is tax-deductible or not;

    • It must have been a non-refunded expense.

    You can get a tax deduction once you pay the cost of a Police/record Check and where your employer does not refund it. Also, you must not expect to be paid or reimbursed by your employer.

    A Police Check that is not sponsored or covered by the employer can qualify for a tax deduction. However, not all expenses made to the Police Check application are tax-deductible. For example, the cost of obtaining other private ID documents relating to the Background Check is not tax-deductible.

    • It must relate to the current employment (income)

    Of course, the deduction should be direct to your earning income, or else it won't count as a tax deduction.

    • You must have a record/receipt to prove them.

    There is a limit to the tax deduction you can receive unless with credible proof and receipts. These records should come from the supplier of the goods/service in the form of a valid tax invoice.

    Also, the record must also contain important details such as;

    • Information about what was purchased

    The receipt should contain the record/background check information or relevant tax-deductible expenses. Of course, without this information, it can be difficult for the ATO to determine if what was purchased is tax-deductible.

    • Who supplied it

    Information about the supplier is also essential as it can tell other helpful information about the purchase.

    • The expense/cost of the material

    This is an essential part of the record, as it will determine the amount that is deducted from your tax.

    • The date of the purchase

    The ATO must also confirm that the purchase happened by confirming it with the date of purchase.

    Can I claim a tax deduction for getting an Identification document?

    No, your identification documents can never be part of the Tax deduction for your Police Check expense. The cost for getting any of the identity documents or any other prerequisite for a Police Check is considered personal to the candidate and does not qualify for a tax deduction.

    For example, a schoolteacher that wants to apply for an updated police check, but must renew their ID documents for the criminal history check, is only eligible for the tax deduction on the Police Check itself. The Police Check expense is only deductible if the Teacher still earns an income/keeps her job from teaching.

    However, if the teacher applicant has no running contract or income from teaching, their expense does not qualify as a tax deduction.

    What if I have issues filing/applying for a tax deduction?

    We understand that dealing with tax may be stressful at times, and we advise that you employ professional tax agents to prepare your tax payments.

    However, you should also be clear about which expenses will be tax-deductible. You should not assume that all your expenses qualify as a tax deduction. The likely expenses to be eligible for a tax deduction are your work-related expenses.

    Sources

    Australian Taxation Office (Income and Deductions) (Working with Children Checks) - https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/other-work-related-deductions/Working-with-children-checks/

    Australian Taxation Office (ATO Community) (Pre Employment Deductible Expenses) - https://community.ato.gov.au/s/question/a0J9s0000001JXfEAM/p00051421

    Australian Taxation Office (ATO Community) (Renewal of Police Check) - https://community.ato.gov.au/s/question/a0J9s0000001JXfEAM/p00051421

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