Private ruling: Deduction - meal expenses
Published: September 2013
Ruling period: Income year ending 30 June 2013.
Date scheme commenced: 1 July 2012.

Ruling: Q1: Are you entitled to claim a deduction for meal expenses? | A1: No. | Q2: Does the Commissioner have any discretion to treat your meal allowance as an overtime meal allowance? | A2: No.

Relevant facts and circumstances: During the 2012-13 income year you were employed in a role that required you to work away from your branch during most of your working hours. You were unable to carry food with you during your working hours because of Occupational Health and Safety (OH&S) concerns. You were instructed when and where you could take your meal break. You were required to purchase your meals wherever you were located when your meal break occurred. The conditions of your employment are covered by an enterprise agreement (EA) which outlined that you were entitled to a meal allowance to compensate for purchasing meals away from your branch, or usual place of work, except when your employer had provided a meal. You received the meal allowance from your employer to purchase your meals in accordance with the EA. The meal allowance did not appear separately on your payment summary. Meal allowance amounts are identifiable on your payslips. The before tax meal allowance amounts and income amounts were combined in your payslips to calculate your taxable income, which was then taxed

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 32-50 | Income Tax Assessment Act 1997 Section 900-60

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. The cost of meals is generally considered to be a private or domestic expense and therefore not deductible under section 8-1 of the ITAA 1997. That is, the cost of meals during a normal working day is a private expense and is not deductible. This is the case even if a person travels to a different station or workplace during the day for work. Please note that the receipt of an allowance does not automatically entitle a person to a deduction. However a deduction may be allowed for overtime meal expenses where a person receives a bona fide overtime meal allowance. To be entitled to claim a deduction for overtime meal expenses, all of the following requirements must be met: · A person must receive a bona fide overtime meal allowance · The meal allowance must be paid to cover the cost of food or drink in connection with the specific overtime worked · The allowance is included as assessable income · The expense must be actually incurred; and · The overtime meal allowance must be paid or be payable under a law of the Commonwealth or of a State or Territory, or under an award, order, determination or industrial agreement in force under such a law. A person can only claim the amount actually incurred. They do not need to provide written evidence of the overtime meal expense if the amount does not exceed the reasonable amount for overtime meal allowance expenses as determined by the Commissioner. A person is not entitled to claim the Commissioners reasonable amounts where the expenses incurred were less than the reasonable amounts. | Detailed Reasoning - Application to your situation: In your case, it is clear that you received a meal allowance paid under an EA to pay for the cost of meals eaten during your normal working day. The meal allowance you received was not paid in relation to the working of overtime. From the facts you have provided, it appears that the allowance was paid to compensate for the inconvenience of being unable to carry food with you during your working hours due to OH&S concerns, and also in relation to your employment circumstances. While we appreciate your circumstances, the Commissioner does not have any discretion to allow you to claim a deduction for your meal expenses. Nor does the Commissioner have any discretion to treat your meal allowance as an overtime meal allowance. Therefore, as you have not received an overtime meal allowance, your meal expenses can not be claimed against your meal allowance under section 8-1 of the ITAA 1997 as the expenses are private in nature. In addition, as the meal allowance is not paid in respect of overtime worked, section 32-50 of the ITAA 1997 also disallows the deduction. Note: Where a taxpayer is eligible to the exemption from substantiation, they can only claim the Commissioner's reasonable rate amount if they had incurred expenses for the same amount. As outline above, they can only claim a deduction for the amount of expense they had incurred.