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Edited version of your written advice
Authorisation Number: 1012910833200
Date of advice: 15 November 2015
Ruling
Subject: Work related expenses
Question 1
Are you entitled to a deduction for the cost of meals purchased when you have received a broken meal allowance or an away from home base meal allowance?
Answer
No
Question 2
Are you entitled to a deduction for the cost of meals when you have received a missed or not finished meal payment?
Answer
No.
This ruling applies for the following period
Year ended 30 June 2015
The scheme commenced on
1 July 2014
Relevant facts
Under your employment agreement you are entitled to receive the following:
● broken meal allowance
● away from home station meal allowance
● missed or not finished meal payment.
A broken meal allowance or the provision of a suitable meal as compensation for the loss of the meal is paid where an employee has commenced a meal break and is called on to recommence work before completing such a break.
When an employee cannot return to their home base and are required to be absent for their meal break a meal or meal allowance will be provided.
If a meal break is commenced within the applicable window (as defined within the employment agreement) and interrupted on one or more occasions with the result that a total of 30 minutes break time has not been taken the employee will be entitled to a meal payment.
If a meal break is not commenced within an applicable window (as defined within the employment agreement) the employee will be entitled to a meal break payment for the relevant period. The employee receives a payment for each hour, or part hour, between the time they were meant to take the meal break and when the meal break is actually taken or the employee is released from duty.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 8-1
Income Tax Assessment Act 1997 section 900-60
Reasons for decision
Summary
You are not entitled to a deduction equivalent to the broken meal and away from home base meal allowances or the missed or not finished meal payments received as the payments relate to meals or meal breaks which form a part of your rostered shift.
Detailed reasoning
Section 8-1 of the Income Tax Assessment Act 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 or a provision of the taxation legislation excludes it.
Taxation Ruling TR 95/13 discusses allowances and reimbursements received by, and the deductibility of work-related expenses incurred by, employee police officers. Whilst you are not a police officer, the principles contained within the ruling can be applied to your situation.
The receipt of an allowance or a payment from their employer does not automatically entitle a taxpayer to a deduction for the equivalent amount.
Paragraphs 137 to 142 and 144 to 146 of TR 95/13 examine the deductibility of the cost of meals. A deduction is not allowable for the cost of meals eaten in the normal course of a working day. In the case of a shift worker, the working day is the hours rostered for each shift. It is our view that the cost of meals will not have sufficient connection with the income-earning activities and, in any case, the cost is a private expense.
A deduction may be allowable where you are required to travel for work purposes to attend a work related conference, training or similar event and the travel involves an overnight stay away from your normal residence.
Deductions relating to broken meal allowance and away from home station meal allowance
These allowances are paid when either you are interrupted whilst on your normal meal break or you are unable to return to your home base and are required to be absent for your meal break.
They relate to your meal breaks during your rostered shift and are compensation for the meal break being delayed or interrupted. The allowances received are not in connection with overtime worked or travelling for work purposes.
Therefore you are not entitled to a deduction equivalent to the broken meal and away from home station meal allowances as these are not expenses incurred to purchase overtime meals or meals when travelling for work purposes.
Missed or not finished meal payment
Missed or not finished meal payments are received when you do not commence or finish your meal break within the window defined in the employment agreement.
An expense must be actually incurred before a deduction can be made. A taxpayer cannot automatically claim a deduction just because they receive a payment.
In this case, you wish to claim a deduction equivalent to the payments received. No deduction is allowable as either you have not incurred the expense or the expense incurred relate to your normal meal break during your rostered shift which is a private expense.