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Ruling

Subject: Meal expenses

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

Your usual place of residence is City A.

You work away in City B for several weeks at a time.

Whilst in City B you stay in temporary accommodation provided by your employer, close to the worksite so you can travel to your workplace as required.

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

You received a meal allowance.

The meal allowance was not shown on your payment summaries 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 allowance provided, however no documentation was retained to substantiate actual expenditure.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 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.

The cost of meals is generally considered to be a private or domestic expense and not deductible. An exception to this is where you are undertaking work-related travel, for instance you attend a work-related seminar in another town and are required to stay overnight. A deduction is allowable for the cost of meals if you are required to sleep away from home, as the meal expense would then form part of the travel expense.

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)

The receipt of an allowance does not automatically entitle an employee to a deduction. It is the nature of the outgoing itself which determines its deductibility: Taxation Ruling IT 2543.

In your situation, the travel between your home and the accommodation provided at your work location is considered simply travelling to work and a private expense. You are not travelling on work; rather you have travelled to work and stayed at your work location for the period of your roster. Consequently the meals are private expenses and no deduction is allowed.