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Ruling

Subject: Travel allowance

Question

Are you entitled to a deduction for meals?

Answer

No

This ruling applies for the following period

Year ended 30 June 2012

The scheme commenced on

1 July 2011

Relevant facts

During the financial year you worked at various remote locations for a number of days.

You were provided with accommodation on site as well as some meals by your employer.

You were responsible for your third meal each day.

You received a Rent/Accommodation Allowance as recorded on your PAYG payment summary.

The allowance was paid to cover expenses incurred by you while you were working at these various locations.

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.

Taxation Ruling TR 2004/6 explains that a taxpayer cannot automatically claim a deduction just because they receive an allowance. The expense must meet the requirements of section 8-1 of the ITAA 1997.

Accommodation, meal and incidental expenses are ordinarily not deductible as they are private and domestic in nature.

The issue of expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location was considered in FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 (Toms' Case).

In Toms' Case, the taxpayer was a forest worker who during the working week lived in a caravan in a bush camp 108 kilometres from his family home in Grafton. He claimed it was too far to travel each day to his work in the forest, so that it was necessary to establish a caravan at the camp. He would return home on weekends. He claimed the costs of maintaining his caravan and other living expenses such as the cost of heating and lighting. The Federal Court considered that the caravan was rendered necessary as much by the taxpayer's choice of the place of his residence in Grafton as by his choice of employment in the forest, and its purpose was to enable him to retain his residence at Grafton although employed in the forest. It was held that the expenses incurred in relation to the temporary accommodation near the workplace while maintaining a family residence in another location were dictated not by his work but by private considerations, and therefore were not deductible.

In your case, you were working and living at various remote locations. You were provided with two meals a day from the canteen and accommodation on site by your employer, you had to pay for your third meal yourself.

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.

This conclusion is not altered by the fact that your employer paid you an allowance.