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Meals when travelling not work-related expenses

Posted by Northadvisory on March 5, 2018

Recent media releases from the Australian Taxation Office (ATO) have stated that they intend to audit more people this coming year over work-related expenses.

A taxpayer has been denied income tax deductions for expenses incurred relating to additional meals spent while working different jobs. The taxpayer was employed as an employee and worked in the same location/city as their main residence. The taxpayer sourced additional work through an agency, and commenced working in other locations. The distance between these other locations is unclear, but it can be assumed they were in different towns/cities that were a substantial distance away.

There was no connection between the employment with the original employer and the additional work completed through the agency in the other locations. However, the taxpayer incurred additional expenses for meals when they travelled to these other locations to complete the additional work.

The taxpayer asked the Commissioner whether they were entitled to claim a tax deduction for these meals.

Briefly, the Commissioner answered no.

The deduction was not allowable as it was incurred in order to put the taxpayer in a position to be able to earn income but not incurred in the actual course of gaining or producing that income. Also, the expenses were considered to be private in nature as they were incurred due to the taxpayer’s choice of where they lived and where they worked.

While the above case may seem quite straight forward, it highlights the ease of which a member of the general public can misinterpret information provided by the ATO. The factsheet for D2 – work related travel expense deductions,  does state that meals incurred while away overnight for work are deductible. However, it does not state that these deductions would be relating to travel with the same employment. Having different or multiple jobs is not considered by the Commissioner, and no statement is made in regards to this in the factsheet.

If you are unsure of whether a tax deduction is eligible to be claimed, please do not hesitate to contact us.

If you have any questions on any of the above issues raised, please do not hesitate to contact us.

Norman Ruan
T: 02 9984 7774