Private ruling: Deduction for meal expenses
Published: January 2013
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Can you claim a deduction for travel expenses up to the Commissioner's reasonable allowance amounts without substantiation? | A1: No

Relevant facts and circumstances: You are employed and with your work you regularly travel away from home. You keep a log book of your work activities. You are usually away from home for several nights a week and you are provided with accommodation and buy your meals as required. You receive meal and overnight allowances from your employer for the time that you are away from home. You do not keep receipts for your meals; however you have a record of the meal allowances you receive from your employer showing the number of allowances and the relevant dates. You have provided an estimate of your spending for breakfast, lunch and dinner, each which exceed the reasonable amount. This estimate is based on you fully expending a set amount of spending money provided to you by your spouse. You receive an accommodation or 'overnight' allowance for the nights are away from home. You do not incur any costs for this accommodation. The meal and the overnight allowances have not been taxed and your employer did not include these payments on your PAYG payment summary. You have been provided with a list for the meal allowance and the accommodation allowance showing the date of the payments and amount paid. You intend to include the meal and accommodation allowances that you receive as income and claim a deduction for the meal expense.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 subdivision 900-B

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. A deduction is allowable for work-related travel expenses incurred by an employee truck driver who is required to sleep away from home and has kept written evidence of the expense. These expenses could include the costs of accommodation, fares, meals or incidentals (Taxation Ruling TR 95/18). Subdivision 900-B also provides that the substantiation requirement to obtain written evidence does not apply to claims by employee taxpayers for expenses covered by: · an overtime meal allowance paid under an industrial instrument; or · a domestic travel allowance or overseas travel allowance, whether or not the allowance is paid under an industrial instrument, · if the amount of the claim for losses or outgoings incurred does not exceed the reasonable amounts. An expense must be actually incurred before a claim can be made. A taxpayer cannot automatically claim a deduction just because they receive an allowance. If an expense is incurred partly for work purposes and partly for private purposes, only the work-related portion is deductible. If a taxpayer relies on the exception from substantiation, they may still be required to show the basis for determining the amount of their claim, that the expense was actually incurred, and that it was for work-related purposes. What counts as evidence for a claim subject to the substantiation exception will vary according to individual circumstances and the nature of the expense. In your case you have provided insufficient evidence to support how you came to this assumption. As you are unable to verify your basis for determining the amount you wish to claim you cannot rely on the exception from substantiation.

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