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GST/HST ITC on Meal Allowance

by Natalie
(Surrey, BC, Canada)

Trucker's Meal Allowances and ITC

Trucker's Meal Allowances and ITC

Can a transportation driver claim GST/HST I.T.C.'s on meal allowance amounts when they have used the $45.00 per day method rather than using actual receipts?

(I know they can only claim the federal portion at 75% for 2010 on meal allowances.)

I have heard they need the actual receipts to claim I.T.C.'s. I have been claiming the ITC based on the simplied method for years. I have researched this and I am not able to find any information on actual receipts or simplied method.

I would think that you could claim the ITC on 75% (meal/entertainment for truck drivers) of $45.00 without receipts since you claim that on the T1 return.

Do you know where to find info on this?


Thanks, Natalie



image of fancy scroll lines



Hi Natalie,

It is my understanding, as a general rule, that if the self-employed trucker is a GST/HST registrant, they can claim an ITC for the portion of the expense that is deductible. This means that if they are allowed to claim 75% of their meal allowance, then they can claim 75% of the ITC which is included in the $45/day allowance.

If the trucker is an employee, I believe a employee GST/HST rebate is claimed. You can find this on the CRA website under Individuals> Tax return> Deductions> Employment expenses> Transportation employees.

I don't have an actual reference for the self employed. I'll keep my eyes out for one though. Maybe some of my site visitors know the CRA reference.







P.S. I would like to remind you there is a difference between information and advice. The general information provided in this post or on my site should not be construed as advice. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever.

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GST/HST ITC on Meal Allowance

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May 11, 2011
CRA Reference
by: Lake

At Businesses> GST/HST> Organizations> ITCs> Calculate on the CRA website, there is this information regarding long-haul truck drivers:

"Long-haul truck drivers will be entitled to a higher ITC on food and beverage expenses beginning March 19, 2007. The ITC limit is increased from 50% to 60%. In 2008 the limit is further increased to 65% on food and beverages.

If you decide to claim the actual allowable ITC amount for food and beverage expenses, you claim 60% of the GST/HST that was paid or became payable on these expenses incurred on or after March 19, 2007. For food and beverage expenses incurred before to March 19, 2007, you still use the 50% limit."


So this is the reference for the detailed method.

Here's my question. Are self-employed individuals allowed to use the simplified method? If you search the CRA website for simplified meal allowance, you get a reference to transportation employees.

With auto expenses, self-employed individuals must use the detailed method. Is it the same with regards meal allowances?

May 11, 2011
Correction to daily amount
by: Natalie

It is $17.00 a meal now so it would be $51.00 a day. I did find information that said "in most cases you would use the same limitation rules as those used for income tax purposes".


Thank you for always being there to answer my questions. I have been researching bookkeeping and tax sites for years and your is by far the best site I have come across. I look forward to using your site on a regular basis.

Natalie

May 11, 2011
Thank you
by: Lake

Aahh, thank you Natalie.

Sorry my apologies. I did know the rates had changed. I am sort of busy lately so I just didn't think to stop and let you know the rates were different.

The quote I pulled off the CRA site had not been updated for current figures.

I am glad you did find the current rates ... and that you actually took the time to come back and post them here.

I really appreciate that! Have a fab-u-lous week!!!


May 20, 2011
Simplied Method for Transportation Employees Only
by: Natalie

The simplified method for meal allowance is only for Transportation employees. Self employed truck drivers must save all receipts to claim the meal allowance for GST/HST ITC and also to claim it on their tax return.

FYI: I just met with an CRA auditor for 2008 and 2009 GST/HST ITC and he had copies of the tax returns for the same years in front of him.

He seemed to be more interested in the amounts claimed on the tax return. I thought they are not allowed to do combined audits anymore which I brought to his attention. He told me that he was only using the T1 for reference on what GST/HST ITC's were claimed. ???

There was no GST/HST ITC claimed for the meal allowance but the simplified method was used on the T1 returns.

Do you have any idea if I am looking at a Tax audit as well when the GST/HST is finished??

Any insight you have is appreciated. Natalie

May 20, 2011
Combined Tax Audits
by: Lake

Hi Natalie,

Thank you for the information on meal allowances for self-employed truck drivers.

I'm sorry but I don't know if you will also be looking at a tax audit as well.

My guess is it will depend on what was found during the GST/HST audit ...

I can understand that the tax return information would be useful during a GST/HST audit as the auditor would want to proof that the sales reported were the same as well as checking that the expenses were in the same ball park.

I did read that it will take a few years for the restructuring to take place which may mean some duplication initially between the two groups initially.

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