| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012432073208
This edited version of your ruling will be published in the public register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet.
Ruling
Subject: Meal allowance
Question
Are you entitled to a deduction for meals?
Answer
No.
This ruling applies for the following periods
Year ended 30 June 2011
Year ended 30 June 2012
Year ended 30 June 2013
The scheme commences on
1 July 2010
Relevant facts and circumstances
You are employed as an employee on a fly in/fly out basis.
You worked for varying periods of time and returned home between the roster periods for your rest and recreation.
You did not work between your roster periods.
Your employer paid for your flights to and from the workplace, and you stayed in employer provided accommodation.
You have provided letters from your employer, who has advised that a meal allowance was included in your hourly rate of pay, only for the days you worked.
The majority of the meals were paid in cash and you have not retained receipts.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Reasons for decision
Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.
For a deduction to be allowable, an expense must be actually incurred, meet the deductibility tests and satisfy the substantiation rules. The receipt of an allowance does not automatically entitle a taxpayer to a deduction.
Expenditure on the daily necessities of life (for example, food and drink) is generally not deductible as it is not incurred in gaining or producing assessable income and is also considered to be private or domestic in nature.
An exception is where a taxpayer is travelling in the course of performing their work duties, for example, an interstate truck driver who travels away from home overnight. In these types of cases, the accommodation, meal and incidental expenses incurred while the taxpayer is travelling are incidental to the proper carrying out of their employment function and cease to be of a private and domestic nature.
In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties that the taxpayer's expenses can be deducted (Taylor v Provan 1975 AC 194).
A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of this travel is incurred to put you in a position to perform your duties of employment, rather than in the performance of those duties. (Taxation Ruling TR 95/34)
In your case, you worked away from your home on a roster basis. Your employer paid for your airfares and accommodation and in addition paid you an amount which was included in your hourly rate of pay to cover your meals on the days you worked. It is considered you were not travelling on work rather you were travelling to work and stayed at your work location for the period of your roster.
Therefore, your meal expenses are considered to retain their character of living expenses. As these expenses are private in nature, a deduction is not allowable. This conclusion is not altered by the fact that your employer paid you an amount to cover meal expenses.
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
