Edited version of your private ruling

Authorisation Number: 1012610148979

Ruling

Subject: Meal expenses

Question

Are you entitled to claim a deduction for meal expenses?

Answer

No.

This ruling applies for the following period

Year ended 30 June 2012

The scheme commenced on

1 July 2011

Relevant facts and circumstances

You worked in Town X.

As your home was in Town Y, you were provided with accommodation.

You had to provide your own meals.

You received a meal allowance.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Reasons for decision

Summary

The meal expenses you incur whilst working in Town X are not deductible expenses as they are considered to be private expenses. The fact that you receive an allowance in relation to the expenses does not change the nature of the expenses, they remain private.

Detailed reasoning

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for losses and outgoings which are incurred in the course of gaining or producing assessable income, unless the losses or outgoings are capital, or are of a capital, private or domestic nature.

Taxation Ruling TR 95/19 discusses the deductibility of meals for airline industry employees at paragraphs 90 to 96. Whilst the ruling is specific to airline industry employees, the principles it contains can be applied to employees in other industries. The ruling states a deduction is not allowable for the cost of meals consumed during the normal course of a working day nor is a taxpayer entitled to a deduction because they received an allowance.

Meal expenses are only deductible where:

• the expense relates to the purchase of a meal when the taxpayer is working overtime and has received an overtime meal allowance, which was paid under an industrial award, or

• the taxpayer incurred the expense when travelling away from home for work purposes.

In FCT v. Cooper (1991) 21 ATR 1616, the private aspect of a claim for meals was considered. Hill J said:

Food and drink are ordinarily private matters, and the essential character of expenditure on food and drink will ordinarily be private rather than having the character of a working or business expense. However, the occasion of the outgoing may operate to give to expenditure on food and drink the essential character of a working expense in cases such as those illustrated of work-related entertainment or expenditure incurred while away from home.

It is considered that the reference to expenditure incurred while away from home is a reference to the scenario where a taxpayer must travel away from home for the purposes of his or her employment. In cases such as this, where a taxpayer is required to travel for work purposes, the Commissioner generally accepts that the cost of meals taken on the trip are deductible, provided the person is away for at least 24 hours.

The critical fact being, however, that the taxpayer must be travelling for work purposes. For example, an office worker attending an interstate conference or a salesman travelling on the road.

In your case, you were not travelling for work purposes when you were completing your duties in Town X. Your employment is based in Town X and it is your personal choice to reside in Town Y. You are considered to be travelling to work rather than travelling on work. As you are not travelling for work purposes, your circumstances do not fall within the scenario that would allow the cost of your meals to be deductible.

Meals are generally private in nature and your circumstances are not considered sufficient to change that character. Consequently, the cost of your day-to-day meals in Town X are not deductible.