Edited version of private advice

Authorisation Number: 1012664563562

Ruling

Subject: Travel allowance

Question 1

Are you entitled to claim the amount you actually incurred without substantiation, where you incur meal expenses of less than the reasonable amount when you travel away from home overnight on work?

Answer

Yes

This ruling applies for the following period

Year ended 30 June 2014

The scheme commences on:

1 July 2013

Relevant facts and circumstances

You are an interstate truck driver and as you sleep away from home, you receive a travel allowance of approximately $xx per day/night for each night you are away, for meals.

You spend on average $xx per day for meals.

The reasonable allowance amount for the areas you travel to is $xx.

You find it difficult to keep or obtain receipts for this expenditure.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1

Income Tax Assessment Act 1997 Division 900

Reasons for decision

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

A deduction is allowable for work-related travel expenses incurred by an employee truck driver who is required to sleep away from home. These expenses could include the costs of accommodation, fares, meals or incidentals (Taxation Ruling TR 95/18 Income tax: employee truck drivers-allowances, reimbursements and work-related deductions).

Division 900 of the ITAA 1997 requires an employee who incurs a work expense to substantiate the expense by keeping written evidence unless they receive a travel allowance, in which case they may claim a deduction without obtaining written evidence where the amount of the expenses claimed is less than the reasonable allowance amount.

Furthermore, the amount of a bona fide travel allowance must be an amount that could reasonably be expected to cover meals or expenses incidental to the travel. What is considered to be a bona fide travel allowance depends on the facts of each case.

In your case, you received a travel allowance from your employer for each night you are required to sleep away from home. It is accepted that the allowance is a bona fide travel allowance. The travel allowance you received must be included as assessable income in your income tax return if you wish to claim a deduction for your travel expenses.

You have stated that on average you spend an amount on meals per day. Taxation Ruling TR 2004/6 Income tax: substantiation exception for reasonable travel and overtime meal allowance expenses explains that an expense must be actually incurred as required by section 8-1 of the ITAA 1997, before a claim can be made. You cannot automatically claim a deduction just because you receive an allowance.

As you receive a bona fide allowance, travel overnight for work and your meal expenses are less than the reasonable amount, you are entitled to claim a deduction without obtaining substantiation, for the expenditure you actually incur on meals.

Note

Even where you rely on the above exception from substantiation, you may still be required to show the basis for determining the amount of your claim and that the expense was actually incurred. That is, you must have a reasonable basis for determining the amount you incurred.