Private ruling: Work related expenses
Date of advice: 19 June 2017
Published: October 2017
Ruling period: Year ended 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Are the meal and accommodation expenses incurred deductable as a cost of earning my income? | A1: No


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 a loss or an outgoing to the extent to which it is incurred in gaining or producing assessable income, except where the loss or outgoing is of a capital, private or domestic nature. In general, accommodation expenses are considered private expenses and consequently are not deductible. Court decisions and decisions of the Administrative Appeals Tribunal/Board of Review provide an independent view and confirm this. The Federal Court decision in FC of Taxation v. Toms 89 ATC 4373; (1989) 20 ATR 466, held that expenses incurred in relation to accommodation near the work place while maintaining a family residence in another location, were not an allowable deduction as they were considered to be private expenses. Although the expenditure must be incurred in order to put one in a position to be able to derive assessable income, it does not necessarily mean that the expenditure is incurred in the course of gaining or producing that income. In your case, the accommodation expenses are incurred to enable you to stay in the proximity of your work location and are a prerequisite to the earning of assessable income. They are not expenses incurred in the course of gaining or producing your assessable income. Consequently you are not entitled to a deduction for accommodation and meal expenses under section 8-1 of the ITAA 1997.

You commenced employment in 2014 for a mining Company. | The worksite for this company is located in Australia. | Your home residence is located approximately 200km away. | Your employer deducts money each week from your income to pay for camp accommodation that includes the provision of meals. | Your employer lists this amount as an after tax deduction on your pay advice.