Truck driver’s new approach for meal expenses
Posted by Northadvisory on November 10, 2017
Employee truck (and other transport) drivers who have been required to sleep away from home overnight due to work have new rules relating to travel expense claims. These new rules take effect from 1 July 2017, meaning the drivers affected need to make adjustments as soon as possible.
Claiming meal expenses
The cost of meals or accommodation is generally a non-deductible private expense unless the occasion of the outgoing gives the expenditure the essential character of a working expense. A typical example of this is expenditure incurred while away from home.
For a truck driver to claim a deduction for meals, there must have been:
- a requirement to sleep away from home overnight, or during a designated rest period, for work
- a travel allowance received by the driver which is included in assessable income, and
- a record of the amounts spent on meals for which the driver was not reimbursed.
However, an employee truck driver is not required to keep a tax receipt for every meal expense if the driver was:
- paid a travel allowance, and
- claiming less than the amount the ATO has published as the “reasonable amount”.
The ATO has recently re-released TD 2017/19. This determination runs through what the Commissioner of Taxation considers a reasonable amount in respect of claims for meal expenses when travelling away from home overnight.
Change for the 2017/18 income year
In the updated determination, the Commissioner has changed the method of calculating of reasonable amounts for employee truck drivers. Instead of the reasonable amount based on a daily rate, it is now based on the type of meal that the driver would have eaten.
The ATO accepts that a truck driver may eat their meals at unconventional times. However, the deduction allowable is based on the type of meal that the driver consumed in the course of work travel. This is of particular importance on days which travel commences and ends, as well as situations where certain meals are not taken (ie drivers sleeping during the day).
Reasonable amounts for employee truck drivers
|From 1 July 2017, the maximum deductible employee truck driver’s meal (food and drink) amount without tax receipts is:|
Employee truck drivers will have access to information that can verify the times that they were driving the truck for work-related purposes, including overnight trips. Not only can a work diary be maintained by employee truck drivers, the information is already recorded for fatigue management purposes. These documents can determine when meal breaks were taken and can be used to tally up the appropriate number of claims.
In accordance with the substantiation requirements of ITAA 1997 Div 900, formal tax receipts are not necessary for amounts claimed below the reasonable amount. However, your client should still be able to demonstrate the basis for their claims.
Businesses employing truck drivers
Businesses in the freight industry (or other industry that employs overnight drivers) may use the old daily rate in calculating the travel allowance on overnight trips.
An opportunity may exist for businsesses in these industries to restructure employment arrangements with their drivers. This could reduce PAYG withholding obligations based on a more accurate split between wages and allowances.
Martin van der Saag
T: 02 9984 7774
T: 02 9984 7774