Private ruling: Work related expenses - overtime meal allowances - exception from substantiation
Published: May 2013
Ruling period: 2011-12 financial year
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for overtime meal expenses? | A1: No. | Q2: Are you able to rely on the substantiation exception for reasonable overtime meal allowance expenses in section 900-60 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: No.

Relevant facts and circumstances: You are an employee. In accordance with your workplace agreement you are paid an annual base pay rate and a supplementary payment. Where applicable, the 'supplementary payment' includes compensation a number of features of your work, including the need to undertake shiftwork, work on weekends and public holidays and leave loadings. The pay rates and other payments expressed in your workplace agreement provide for all conditions of employment with your employer. Accordingly, no additional allowances, loadings or premiums of any form are paid for specific workplace conditions or variations in working time except as provided for in the agreement.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 32-5 | Income Tax Assessment Act 1997 subsection 32-10(1) | Income Tax Assessment Act 1997 Subdivision 32-B | Income Tax Assessment Act 1997 section 32-50 | Income Tax Assessment Act 1997 subsection 900-30(4) | Income Tax Assessment Act 1997 subsection 900-30(5) | Income Tax Assessment Act 1997 section 900-60 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: You do not receive a separate overtime meal allowance in connection with specific overtime occasions, and as such you are not entitled to a deduction for overtime meal expenses. As you are not entitled to a deduction for overtime meal expenses the substantiation exception in section 900-60 of the ITAA 1997 has no application. | Detailed Reasoning - Detailed reasoning: You can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income except where the loss or outgoing is capital or private in nature. A deduction is also not allowable if another provision of the Act prevents it (section 8-1 of the Income Tax Assessment Act 1997 ). The cost of meals is generally considered to be a private expense and not deductible under section 8-1 of the ITAA 1997 unless the expense is considered to be a work expense incurred in producing salary or wages. Meal allowance expenses are work expenses if they are incurred for food or drink and are covered by a meal allowance (subsection 900-30(4) of the ITAA 1997). A meal allowance is an amount that the employer pays to an employee to enable the employee to purchase food or drink (subsection 900-30(5) of the ITAA 1997). To the extent that you incur a loss or outgoing in respect of providing entertainment, you cannot deduct it under section 8-1 of the ITAA 1997; however, there are exceptions set out in Subdivision 32-B of the ITAA 1997 (section 32-5 of the ITAA 1997). Entertainment is defined to include food or drink (subsection 32-10(1) of the ITAA 1997). One of the exceptions in Subdivision 32-B of the ITAA 1997 where section 32-5 of the ITAA 1997 will not apply to prevent a deduction is if: · a taxpayer purchases food or drink in connection with overtime they worked, and · the taxpayer receives an allowance under an industrial instrument to buy the food or drink (section 32-50 of the ITAA 1997 at item 5.1). An industrial instrument includes an award or industrial agreement (section 995-1 of the ITAA 1997). Taxation Ruling TR 2004/6 deals with the substantiation exception for reasonable overtime meal allowance expenses. Paragraph 51 of TR 2004/6 provides that an amount for overtime meals that has been folded-in as part of normal salary or wages, for example, under a workplace agreement, is not considered to be an overtime meal allowance. In your case, you are paid a supplementary payment in addition to your base pay under a workplace agreement. This supplementary payment is paid to compensate you for, amongst other things, meals taken outside of normal rostered hours. You are not paid an allowance under an award or industrial agreement. In addition, your workplace agreement provides that a normal rostered shift consists of not more than 12 hours and does not provide for overtime. As you do not receive a separate overtime meal allowance in connection with a specific overtime occasion, you do not receive an allowance for the purposes of section 32-50 of the ITAA 1997. Accordingly, you are not entitled to claim a deduction for overtime meal expenses under section 8-1 of the ITAA 1997, and as such the substantiation exception for reasonable overtime meal allowance expenses in section 900-60 of the ITAA 1997 has no application.