Edited version of private ruling

Authorisation Number: 1011854793124

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. Contact us at the address given in the fact sheet if you have any concerns.

Ruling

Subject: Work related expenses - meals

Question 1

Are you entitled to claim the Commissioners reasonable travel allowance amount for the cost of meals purchased when you are required to sleep away from home?

Answer

No.

Question 2

Are you entitled to claim a deduction for meals expenses incurred when required to sleep away from home on work?

Answer

Yes.

Question 3

Are you required to substantiate your meal expenses?

Answers

Yes.

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You are currently employed as a truck driver.

The conditions of your employment require you to travel away from your home depot.

This travel sometimes requires you to sleep away from home.

When you are required to travel away from home you leave the work depot in the afternoon and do not return until the following night.

You incur the following costs for meals when required to travel away.

· Dinner

· Breakfast

· Lunch and

· Dinner the following evening

You are paid an allowance under your employment agreement for occasions when you are unable to return home and you take a major rest break. This allowance provides for when you are unable to return home at night and the employer does not provide suitable accommodation away from the vehicle.

You have provided copies of payslips showing these allowances.

You are not paid a travel allowance.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses or outgoings to the extent to which they are incurred in gaining or producing assessable income, except to the extent that they are outgoings of a capital, private or domestic nature, or relate to the earning of exempt income.

The cost of meals or accommodation is generally a non-deductible private expense unless the occasion of the outgoing gives the expenditure the essential character of a working expense, as in exempt income.

Taxation TR 95/18 considers the deductions available to an employee truck driver.

TR 95/18 states that a deduction may be allowable if meal costs are incurred by a truck driver who sleeps away from home while travelling for income earning purposes. However, a deduction is not allowable for the cost of meals eaten during a normal working day.

Commissioners reasonable travel allowance

Taxation Ruling TR 2004/6 states that for domestic and overseas travel allowance expenses to be considered for exception from substantiation, the employee must be paid a bona fide travel allowance to cover specific travel. 

A bona fide travel allowance is an amount paid that could reasonably be expected to cover accommodation or meals, or expenses incidental to the travel, and must be paid for specific journeys undertaken or to be undertaken for work-related travel.

Paragraph 11 of TR 2004/6 the ruling confirms the application of section 8-1 of the ITAA 1997, that an expense must actually be incurred before a claim for a deduction can be made, regardless of the receipt of an allowance.

In your case, you are truck driver and you are required to sleep away from home. You have incurred expenses for purchase of meals while away from home. When you are away from home you sleep in your truck. You are paid an allowance under your employment agreement for occasions when you are unable to return home and you take a major rest break. This allowance is provided where you are unable to return home at night and your employer does not provide you with suitable accommodation away from your vehicle.

The allowance you receive is not considered a bona fide travel allowance to cover specific meals on journeys when you sleep away from home. Therefore, you are not entitled to claim the Commissioner's reasonable travel allowance amount for meals purchased whilst you are working away from home.

Meal expenses when travelling for work and the travel requires a sleep away from home

If no bona fide meal allowance is received:

· expenses claimed must have been incurred

· expenses claimed must satisfy section 8-1 of the ITAA 1997

· the whole claim must be supported by written evidence.

In your case, you are required to travel on work and as a result sleep away from home. You purchase dinner on the outward journey and purchase breakfast, lunch and dinner on the second leg of your return journey home. You are entitled to a deduction for the cost of meals on these occasions where your travel requires you to sleep away from home. Your employer does not pay you an allowance to cover the cost of meals while you are away; therefore, you are required to substantiate your meal expenses in full.

The costs for the purchase of meals you incur whilst when travelling for work which includes a sleep away from home are deductible under section 8-1 of the ITAA 1997.

Substantiation

Division 900 of the ITAA 1997 outlines the substantiation rules for work related travel expenses.

The documentary evidence required by the substantiation provisions under section 900-115 of the ITAA 1997 for expenses other than depreciation comprises documentation from the supplier that sets out the:

· Name or business name of the supplier

· Amount of the expenses

· Nature of the goods or services

· Date the expenses was incurred, and

· Date of the document.

In most cases, a receipt can be obtained for the cost of a meal. It is considered reasonable for an employee to obtain receipts for most meal expenses incurred.

It may not be reasonable for an employee to obtain receipts for some food and drink purchases, for example from vending machines or outlets that do not normally provide a receipt. These expenses are considered otherwise too hard to substantiate under section 900-130 of the ITAA 1997 and you can also make a record, such as a diary, of these expenses. The record must contain the same information as required in section 900-115 of the ITAA 1997.

A log book showing details of each trip undertaken is not sufficient evidence of expenses as it does not provide details in accordance with section 900-115 of the ITAA 1997. Therefore, you cannot substantiate your travel expenses by using a log book.

Documentation substantiating your meal expenses and other work related expenses should be retained by you for five years from due date for lodging the income tax returns for the income year the expenditure was incurred or, if a return lodged later, the date the return is lodged.

For further information on written evidence and the record keeping requirements please see pages 33 TaxPack 2011 or the Tax Office's website at www.ato.gov.au