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Edited version of private ruling
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Ruling
Subject: Work related expenses
Are you entitled to a deduction for overtime meal allowance expenses?
No.
This ruling applies for the following period:
Year ending 30 June 2010
The scheme commenced on:
1 July 2007
Relevant facts and circumstances
You work for an employer.
You receive a Miscellaneous Allowance which includes an amount folded-in for meals.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1.
Income Tax Assessment Act 1997 Subsection 900-30(4).
Income Tax Assessment Act 1997 Subsection 900-30(5).
Income Tax Assessment Act 1997 Section 32-5.
Income Tax Assessment Act 1997 Section 32-50.
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. A deduction will also not be allowable if another provision prevents it.
The cost of meals is generally considered to be a private or domestic expense and not deductible. However subsection 900-30(4) of the ITAA 1997 states that overtime meal allowance expenses are work expenses if they are incurred for food or drink and are covered by a meal allowance. A meal allowance is an amount that the employer pays to an employee to enable the employee to purchase food or drink (see subsection 900-30(5) of the ITAA 1997).
Section 32-5 of the ITAA 1997 provides that any loss or outgoing in respect of providing entertainment will not be deductible under section 8-1 of the ITAA 1997. Entertainment is defined to include food or drink (subsection 32-10(1) of the ITAA 1997).
However, section 32-50 of the ITAA 1997 at item 5.1 provides that section 32-5 of the ITAA 1997 will not apply to prevent a deduction if:
· the purchase of food or drink is in connection with overtime worked by you, and
· you receive an allowance under an award or industrial instrument to buy the food or drink.
Taxation Ruling TR 2004/6 deals with the substantiation exemption for reasonable allowances. The ruling provides that the allowance must be a bona fide allowance. That is, paid to enable the purchase of food or drink in connection with a specific occasion when overtime is worked. An example of when a payment is not considered to be an overtime meal allowance is where an amount for overtime meals that has been folded-in as part of normal salary or wages.
In your case, you receive a miscellaneous allowance from your employer to cover meals amongst other things.
As you have not received separate overtime meal allowances in connection with a specific overtime occasions, you have not received an allowance for the purposes of section 32-50 of the ITAA 1997.
Accordingly, you are not entitled to claim a deduction for overtime meal expenses.