Edited version of your private ruling

Authorisation Number: 1012222388096

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 claim a deduction up to the Commissioner's reasonable amounts for meals covered by a meal allowance, providing the amount of the expense claimed was actually incurred and the allowance is included in your assessable income?

Answer:

No.

This ruling applies for the following periods:

Year ended 30 June 2010

Year ended 30 June 2011

Year ended 30 June 2012

The scheme commences on:

1 July 2009

Relevant facts and circumstances

You work in City B.

Your usual place of residence is in City A.

While working in City B on your four week shift, you stay in accommodation provided by your employer.

You are then called upon to work for a number of days at a time.

You are required to cover the costs of your own meals for the entire period.

You receive a meal allowance.

The meal allowance is not shown on your payment summary as it was less than the reasonable amount and was fully expended on meals.

The actual cost of the food was in fact far greater than the meal allowances provided, however no documentation was retained to substantiate actual expenditure.

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.

Meal expenses are normally private or domestic in character. However, where a taxpayer is away from home overnight in connection with an income producing activity, meal expenses are deductible under section 8-1 of the ITAA 1997. The expenditure is not considered private because its occasion is the taxpayer's travel away from home on income producing activities.

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).

In FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 (Toms case) the Federal Court disallowed a forest worker's deduction for the cost of maintaining a caravan and other living expenses. The taxpayer incurred the expenses in providing temporary accommodation at the base camp because the taxpayer had chosen to reside at a place far from the worksite. These expenses were dictated not by work but by private considerations.

In your case, your accommodation close to your workplace is considered to be your second residence for the periods you are working. As such, you are not considered to be away from home overnight. As in Toms case, expenses you incur for meals are not work related expenses and are considered to be private. Accordingly, a deduction for these expenses is not allowable.