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Edited version of private advice
Authorisation Number: 1051625346537
Date of advice: 21 January 2020
Ruling
Subject: Accommodation and meal expenses
Questions and answers
- Are you entitled to claim a deduction for accommodation and meal expenses?
Yes.
- Are you required to substantiate your expenses claims?
Yes.
This ruling applies for the following period
Year ended 30 June 2019
The scheme commences on
1 July 2018
Relevant facts and circumstances
You are employed full time as a manager.
Your job currently requires you to travel from your work base to a work site in order to perform your job. You travel from your work place to a work site and return to your work base at the end of each work week. For this you incur expenses for accommodation and meals.
Your employer does not pay you a travel allowance. Instead, they pay you an amount for accommodation and meals which is not shown separately on your PAYG payment summary. It is included as part of your gross salary and wages.
Your expenses for accommodation and means exceed the extra amounts included in your salary and wage.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 8-1
Income Tax Assessment Act 1997 Division 900
Reasons for decision
Deductions
Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for all outgoings to the extent to which they are incurred in gaining or producing assessable income, or are necessarily incurred in carrying on a business for that purpose. However, a deduction is not allowable for outgoings that are of a capital, private or domestic nature.
In your case, you are required by your employer to work away from your work place. Currently this required you to travel from your work place to a work site and returning to your work base at the end of each work week. For this, you incur expenses for accommodation and meals. These expenses exceed the allowance paid to you by your employer.
The expenses are incurred in the course of gaining or producing your assessable income. A deduction is therefore allowable for the expenses you incur for accommodation and meals.
For information on travel allowances go to www.ato.gov.au and enter quick code QC 18645 into search and for information on exceptions for keeping travel expense records QC 56003.
Substantiation
Division 900 of the ITAA 1997 states that to qualify for a deduction for work related expenses you are required to substantiate your claims by getting written evidence. You do this by maintaining written evidence of your expenses in the form of receipts and invoices or other documentation, such as bank statements. The written evidence must set out:
- the name of the business or supplier; and
- the amount of the expense; and
- the nature of the goods and serviced supplied; and
- the day the expense was incurred; and
- the day it was made out.
For small expenses of $10 or less where you are unable to obtain written evidence, you may record the expense details in, for example, a work diary. The total of these small expenses must not exceed $200 in a year of income.
The exemption from substantiation rules do not apply to your situation because you did not actually receive a travel allowance.
For information on the records you need to keep for substantiation go to www.ato.gov.au and enter quick code QC 31973 into search.