Private ruling: Meal allowance
Published: March 2013
Ruling period: Year ended 30 June 2011 | Year ended 30 June 2012 | Year ended 30 June 2013
Date scheme commenced: 1 July 2010

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

Relevant facts and circumstances: You are employed as an employee on a fly in/fly out basis. You worked for varying periods of time and returned home between the roster periods for your rest and recreation. You did not work between your roster periods. Your employer paid for your flights to and from the workplace, and you stayed in employer provided accommodation. You have provided letters from your employer, who has advised that a meal allowance was included in your hourly rate of pay, only for the days you worked. The majority of the meals were paid in cash and you have not retained receipts.

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

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. For a deduction to be allowable, an expense must be actually incurred, meet the deductibility tests and satisfy the substantiation rules. The receipt of an allowance does not automatically entitle a taxpayer to a deduction. Expenditure on the daily necessities of life (for example, food and drink) is generally not deductible as it is not incurred in gaining or producing assessable income and is also considered to be private or domestic in nature. An exception is where a taxpayer is travelling in the course of performing their work duties, for example, an interstate truck driver who travels away from home overnight. In these types of cases, the accommodation, meal and incidental expenses incurred while the taxpayer is travelling are incidental to the proper carrying out of their employment function and cease to be of a private and domestic nature. In considering the deductibility of travel expenses a distinction is made between travel to work and travel on work. It is only if the duties of the job require a taxpayer to travel in the course of undertaking their work duties that the taxpayer's expenses can be deducted ( Taylor v Provan 1975 AC 194). A deduction is generally not allowable for the cost of travel by an employee between home and their normal workplace as it is considered to be a private expense. The cost of this travel is incurred to put you in a position to perform your duties of employment, rather than in the performance of those duties. (Taxation Ruling TR 95/34) In your case, you worked away from your home on a roster basis. Your employer paid for your airfares and accommodation and in addition paid you an amount which was included in your hourly rate of pay to cover your meals on the days you worked. It is considered you were not travelling on work rather you were travelling to work and stayed at your work location for the period of your roster. Therefore, your meal expenses are considered to retain their character of living expenses. As these expenses are private in nature, a deduction is not allowable. This conclusion is not altered by the fact that your employer paid you an amount to cover meal expenses.

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