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Ruling

Subject: Meal allowance

Question 1

Are you entitled to a deduction for meal expenses and incidentals up to the reasonable amount when you have not kept records of your expenses?

Answer

No.

This ruling applies for the following periods:

Year ended 30 June 2009

Year ended 30 June 2010

Year ended 30 June 2011

The scheme commences on:

1 July 2008

Relevant facts and circumstances

This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.

You complete your duties as a carer in the Sydney region.

You start work at 6pm for a period of at least 12 hours.

Your general duties include assisting with feeding of meals and fluids as required, general house keeping duties, administering medication, personal care and completing necessary paperwork.

During the 2011 financial year your employer has paid a bona fide meal allowance per shift.

The meal allowance is separately shown on your payment summary.

You have incurred costs for breakfast and dinner, but have not kept any expense records.

You want to claim a deduction for meal expenses and incidentals up to the reasonable amount set out by the Commissioner for Sydney in Taxation Determination TD 2010/19 that is applicable to your salary level.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1 and

Income Tax Assessment Act 1997 Subdivision 900-B.

Detailed reasoning

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.

The cost of meals is generally considered to be a private expense and not deductible under section 8-1 of the ITAA 1997 unless the expense is considered to be a work expense incurred while earning salary or wages.

The reasonable amounts for domestic travel allowance expenses are discussed in TD 2010/19. Paragraph 11 sets out amounts the Commissioner considers reasonable for meal and incidental expenses for the substantiation exception in Subdivision 900-B of the ITAA 1997. In order to utilise the reasonable amounts for these expenses, the employee is required to sleep away from home.

Paragraph 89 of Taxation Ruling TR 2004/6 states that travel away from the employee's ordinary residence means, for most employees, that the travel involves an overnight stay. However, some employees may work at night and sleep during the day. Therefore the term sleep away from home is used to demonstrate that simply completing work duties at night will not be considered travel away from an employee's ordinary residence.

In your case, you are required to carry out your work duties at night. We do not consider you to be travelling away from your ordinary residence overnight. Therefore, you are not entitled to a deduction using the reasonable amounts in TD 2010/19 for meal expense and incidentals. The expenses you have incurred are considered private in nature and you are not entitled to a deduction under section 8-1 of the ITAA 1997.