Private ruling: Meal expenses
Published: October 2012
Ruling period: Year ended 30 June 2010
Date scheme commenced: 1 July 2009

Ruling: Q1: Are you entitled to a deduction for meals? | A1: No.


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

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. The payment of an allowance does not automatically entitle the taxpayer to a deduction. The expense must be incurred in the course of producing assessable income ( Amalgamated Zinc (De Bavay's) Ltd v. FCT (1935) 54 CLR 295; (1935) 3 ATD 288; [1936] ALR 67). As a general rule, expenditure on meals and accommodation while working away from home is not allowed as a deduction. These costs are essentially 'living expenses' of a private or domestic nature. The fact that income cannot be earned unless certain expenses are necessarily incurred is not determinative of deductibility. The costs of maintaining a second home in a place the taxpayer regularly visits on business are unlikely to be deductible. In FC of T v. Toms 89 ATC 4373; (1989) 20 ATR 466 the Federal Court disallowed a forest worker's deduction for the cost of maintaining a caravan and other living expenses. The taxpayer incurred the expenses in providing temporary accommodation at the base camp because the taxpayer had chosen to reside at a place far from the worksite. These expenses were dictated not by work but by private considerations. In your case, your meal expenses do not have a sufficient connection with your income producing activities. The extra expenses of food and accommodation are considered to be of a private and domestic nature. Accordingly, a deduction for the cost of meals is not allowable.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You were employed in City A as a fly in/fly out employee. | You were advised that your accommodation, meals and flights would be provided. However, when you arrived you were advised that accommodation was very limited so your employer provided you with a company house and you were given an allowance per week for food.