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Edited version of your written advice
Authorisation Number: 1012788946170
Ruling
Subject: Work related expenses - food and accommodation
Question
Are you entitled to a deduction for living expenses including food and accommodation, incurred while working away from your usual place of residence?
Answer
No
This ruling applies for the following period:
Year ended 30 June 2014
The scheme commenced on:
1 July 2013
Relevant facts and circumstances
You obtained employment in City X.
Your usual place of residence is in City Y.
You travel from your home to City X for work. Your family remains in City Y.
You are required to stay in City X for a period of four weeks on then you return home for one week off.
During your four week on periods you maintain temporary accommodation in City X which consists of a room at the home of a relative. You pay an amount per week for accommodation.
You also incur meal expenses while you are in City X.
You do not receive any allowance or support from your employer to offset the additional expenses.
You have on occasion, carried bulky tools with you in your flights between your home in City Y and City X.
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.
Generally, travel and accommodation expenses incurred by an employee who lives away from home to carry out the duties of his employment will not be deductible. Expenses of this nature have been found to be private or incurred before or after the activity of earning assessable income. Meal expenses are also inherently private in nature and generally not deductible.
In FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466, 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 you maintained temporary accommodation in City X. The accommodation expenses you incurred enabled you to stay in proximity to your work place and arrive at work on time. They were a prerequisite to the earning of assessable income and were not expenses incurred in the course of gaining or producing that income.
Further, the essential character of the accommodation and food expenses is of a private or domestic nature as they arose due to your choices of where to work and where to live.
Accordingly your living expenses, including food and accommodation are not deductible under section 8-1 of the ITAA 1997.