Recent Tribunal Decisions Highlight Risks in Self-Education Claims

The Administrative Appeals Tribunal (AAT) has recently handed down decisions that should serve as a cautionary tale for taxpayers looking to claim self-education expenses on their tax returns.

What's the issue?

The AAT has reaffirmed the ATO's strict approach to self-education claims, particularly when there is no clear and direct connection between the study and the taxpayer's current income-earning activities.

In one case, a taxpayer was denied a deduction for a university course that they hoped would help them change careers. While the course may have been related to future employment, the Tribunal held that expenses for future or new roles aren't deductible under current law.

What does this mean for you?

To successfully claim self-education expenses, the course must:

• Directly relate to your current job, and
• Maintain or improve the specific skills required in that job, or
• Be necessary for continuing employment in your current role.

Common claim mistakes include:

• Studying for a qualification to change careers
• Claiming costs for courses with only a general or indirect link to your work
• Including travel or meal costs without meeting eligibility criteria

The message is clear: review your self-education deductions carefully and seek professional advice if you’re unsure. Claiming ineligible expenses can trigger ATO audits and lead to penalties.

Want to review your self-education deductions this tax time? Contact our office — we're here to help you claim confidently and correctly.

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Yan Qi CA

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