Can a professional photographer claim expenses such as dental, chiropractor and general cosmetic expenses as a business expense?
Important:
This answer is based on tax law year ending 28 February 2019.
Answer:
Judge Conradie, in the Warner Brothers case, said that “deductible expenditure has certain characteristics: it must be incurred in the production of income (s 11(a)) and will not be allowed as a deduction against gross income if it is not laid out or expended for the purposes of trade.”
It is only where this is not “qualifying medical expenses” when it may qualify to be deducted under section 11(a). The issue is whether or not it is qualifying medical expenses as defined in section 6B. We accept that, if he was a member of a medical scheme it may not have been covered. This is because cosmetic surgery (we don’t know what “teeth” entails) is elective and for that reason not usually covered by medical schemes. It may also not qualify as a “relevant health service” in terms of the definition in the Medical Schemes Act, 1998. The Income Tax Act, however, doesn’t refer to this.
The section 6B(1)(a)(i) requirement is that it must be “amounts … paid by the person … to any duly registered medical practitioner, dentist, optometrist, homeopath, naturopath, osteopath, herbalist, physiotherapist, chiropractor or orthopedist for professional services rendered or medicines supplied to the taxpayer…” The subsection doesn’t, as with nursing or a nurse (in item (ii)), refer to illness or confinement. The item (i) expenses are also not further qualified as is for instance expenses in consequence of any physical impairment or disability suffered by the taxpayer – there the expenses must be prescribed by SARS.
The only requirements then seem to be that it is paid to a duly registered person (mentioned in the section) and that it must be for professional services rendered. We submit that duly registered refers to registered with the Health Professions Council of South Africa – see SARS’s guide on the determination of medical tax credits and allowances.
No guidance is given on the meaning of professional services rendered and the phrase must take its ordinary meaning. The Health Professions Act, 1974, refers to a person practicing “any health profession the practice of which mainly consists of -
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the physical or mental examination of persons;
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the diagnosis, treatment or prevention of physical or mental defects, illnesses or deficiencies in man humankind;
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the giving of advice in regard to such defects, illnesses or deficiencies; or
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the prescribing or providing of medicine in connection with such defects, illnesses or deficiencies…”
As the taxpayer would bear the onus of proof if the claim is disputed (it could well be that SARS’s view may be that it is not qualifying medical expenses) it is suggested that you provide the client with a tax opinion or obtain one from SARS.
If the deduction is to be made in terms of section 11(a) one will have to consider section 23(a) and section 23(g). In other words, a private use adjustment would be required.