Private ruling: The deductibility of work related food expense
Published: November 2013
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Are you entitled to a deduction for body building supplements purchased and consumed as a part of your employment? | A1: No.

Relevant facts and circumstances: You are employed as a salesman for a business that sells body building supplements. Your employer requires you to purchase and use the body building supplements that you sell, so that you can share your knowledge of the products and their benefits to prospective customers. Your accountant has advised that the expenses cannot be claimed as a deduction, as similar claims have been rejected by the ATO for employees in the fields of personal training, police and the armed forces. You believe that your situation differs from the above taxpayers, as it is a requirement of your employment that you use the body building supplements and therefore a deduction should be allowed for such expenses.

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

Reasons for decision: Summary: Although the products you consume are body building supplements, body building supplements are considered 'food' for the purposes of this ruling. Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows for 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. The Full Federal Court considered the deductibility of food costs in FC of T v Cooper (1991) 21 ATR 1616; 91 ATC 4396 (Cooper Case). In that case, a professional footballer had been instructed to consume large quantities of food during the off season to ensure his weight was maintained. By majority, the Full Federal Court found that the cost of additional food to add weight of the taxpayer was not allowable. Hill J (FCR at 199-200; ATC at 4414; ATR at 1936) said: The income-producing activities to be considered in the present case are training for and playing football. It is for these activities that a professional footballer is paid. The income-producing activities do not include the taking of food, albeit that unless food is eaten, the player would be unable to play. Expenditure on food, even as here additional food does not form part of expenditure related to the income-producing activities of playing football or training. Hill J went on to say (at FCR at 201; ATC at 1638): Food and drink are ordinarily private matters, and the essential character of expenditure on food and drink will ordinarily be private rather than having the character of a working or business expense. Further, Hill J stated (FCR at 200; ATC at 4414; ATR at 1636): ...the fact that the employee is required, as a term of his employment, to incur a particular expenditure, does not convert expenditure that is not incurred in the course of the income-producing operations into a deductible outgoing. Although in that case the taxpayer was required to consume food to maintain his weight, the legal reasoning provided in disallowing the claim is relevant to your circumstances. Whilst we acknowledge that your employer requires you to purchase and consume food related to industry in which you work, as with the above case it does not change the character of the expense from being private or domestic to being incurred in gaining or producing assessable income. Accordingly you cannot claim a deduction for expenses incurred in purchasing body building supplements under section 8-1 of the ITAA 1997. The rulings in the register have been edited and may not contain all the factual details relevant to each decision. Do not use the register to predict ATO policy or decisions.