Private ruling: Meals
Published: November 2012
Ruling period: Year ending 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for meals when you receive an allowance? | A1: No.

Relevant facts and circumstances: You are an employee driver. You are not allowed to leave your truck for lunch while working because you carry a weapon. You receive an allowance which is paid because you do not have access to amenities.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1. | Income Tax Assessment Act 1997 Section 32-50.

Reasons for decision: Summary: 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, or relate to the earning of exempt income. Allowances received by an employee from an employer are generally assessable income to the employee. However, an employee is not automatically entitled to a deduction for expenses incurred in relation to an allowance. The expenses must meet the criteria for deductibility under section 8-1 of the ITAA 1997 and the substantiation requirements. The cost of meals is generally considered to be a private expense and not deductible under section 8-1 of the ITAA 1997. However under section 32-50 of the ITAA 1997, a deduction may be allowable for the cost of meals to do with overtime worked by a taxpayer if the taxpayer receives a genuine overtime meal allowance under an industrial instrument to buy the food or drink. That is, to be a genuine overtime meal allowance, the allowance needs to be paid for specific individual instances that you work overtime and the amount of the allowance must enable you to buy food and drink in connection with the overtime worked. In your case, while we accept that you are not allowed to leave the truck for lunch, you are not working overtime and you are not paid a genuine overtime meal allowance. Therefore, you are not entitled to claim a deduction for meal expenses as they are considered to be a private expense.

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