Private ruling: Meals and entertainment
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are you entitled to a deduction for meal and entertainment expenses? | A1: No.


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

Reasons for decision: Summary: Section 8-1 of the 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. | Detailed Reasoning - Meal expenses: Expenditure on the daily necessities of life, for example food and drink, are generally not deductible, unless the outgoing gives the expenditure the essential character of a working expense, as it is not incurred in gaining or producing assessable income and is also private or domestic in nature. However, there are two situations where meal expenses may be deductible. These are where a taxpayer is away from home overnight in connection with an income producing activity or where a taxpayer is paid an allowance in connection with overtime worked. In your case, when you undertake your shifts you are not considered to be away from home overnight in connection with your income producing activity. Rather, you are merely performing your normal duties and may be permitted to sleep when your assistance is not required. Therefore, as you are not sleeping away from home in connection with your income producing activity or receiving an allowance in connection with overtime you are not entitled to a deduction for meals. | Detailed Reasoning - Cost of your own entertainment: Whilst we accept that you may take clients on outings the costs you incur are for you to attend. It is not a requirement of your duties that you take the clients to the particular outings and any expenses you incur are private in nature and not deductible.

Relevant facts: You are a casual employee who works on overnight shifts. | You are required to provide your own meals during a shift and do not receive a meal allowance. | You sometimes take your clients on outings. It is not mandatory to do this. However, when you take a client out, the client pays for their own entertainment and you have to pay for your own entertainment.