Taxing Questions: Can I Claim on My Facelift?
June 13, 2003
“Can I Claim on My Facelift”
– Answers to Taxing Questions Goes Nationwide
No one likes to disappoint their customers, least of all a massage parlour hostess. But age and gravity take their toll and for one New Zealand parlour operator her recent facelift, if not exactly the source of her fortune, certainly helped maintain her desirable image.
Facelifts don't come cheap so she asked law analyst and legal publisher CCH, well-known for its annual New Zealand Master Tax Guide, if her parlour could claim the operation as tax deductible. After all, her clients were definitely impressed by her improved appearance and that was good for business.
Spending on one's appearance is something many people try to claim through Inland Revenue as essential to business. But Auckland-based CCH's analysts told the hostess that, while she might be able to put a good argument that the facelift was needed for work purposes, she was likely to be out of luck convincing IRD.
"It's a grey area of the law where there's no clear-cut answer," they admitted. "But, on the face of it, this one seems more like personal expenditure which is not deductible."
An analysis of similar cases showed that Inland Revenue would probably say it was purely personal spending. It was difficult to draw a clear distinction between presenting oneself to advantage (non-deductible) and equipping oneself for income-earning (possibly deductible), they said.
People who had been turned down before her include the self-employed actor who wanted to claim on medical treatment he had for depression and a troublesome throat; the self-employed actress who had a throat operation to remedy a speech defect; and the pilot who had surgery so he could wear a standard issue headset comfortably.
But one who partly succeeded in his claim was the male model who was granted partial deductibility on the grounds that his spending on facials, sun tanning, laser treatment and manicures was half for his work as a model (deductible) and half for maintaining his general appearance (non-deductible).
"It all goes to show that tax law is not a dull area but deals with the complex decisions people make about their lifestyles every day," CCH managing director Sharon Bennett says.
She has a team expert of analysts answering the vital questions, who every day answer 30-plus questions of all types on tax and other legal issues. Clients' queries are responded to by email within 24 hours. The service compliments CCH’s Online Library, a continuously updated collection of business law commentary, cases and legislation.
CCH is promoting it’s Online Library as part of LAWsuite, a range of internet and software services now being offered to 1600 small and medium-sized law firms round the country to help with their administrative, knowledge and website needs.
The others are LAWbase, a desktop software programme already used in over 300 New Zealand law firms to streamline their administrative practices; WebFlavours, a series of templates helping firms develop and maintain their own websites; and CCH Forms, a comprehensive, ready-made supply of standard and approved legal forms.
Contact CCH on 0800 500 224.