Principal Issues: Whether there are any changes to the flat rate amount that a self-employed foot and bicycle messenger can deduct for extra food and beverages without supporting documentation.
Position: Yes.
Reasons: CRA policy, effective for 2003 and subsequent taxation years, increased the flat rate amount that can be claimed without receipts to $15 per working day..
Randy Hewlett, B.Comm.
XXXXXXXXXX 613-941-7239
2004-010327
December 7, 2004
Dear XXXXXXXXXX:
Re: Self-Employed Foot And Bicycle Messengers Deduction For Extra Food And Beverages
We are writing in response to your e-mail of November 15, 2004, wherein you inquired whether there were any recent changes to the flat rate amount that a self-employed foot and bicycle messenger could deduct for extra food and beverages without supporting documentation.
As a result of the Federal Court of Appeal decision in Alan Wayne Scott v. Her Majesty The Queen (1998 DTC 6530), foot and bicycle messengers and rickshaw drivers can deduct the cost of extra food and beverages that are consumed to enable them to carry on their business. Effective for 2003 and subsequent taxation years, the flat rate amount that can be claimed without receipts has been increased to $15 per working day.
Alternatively, the actual expenses may be claimed provided the amounts are supported by receipts. The flat rate amount is based on the same rate that applies in respect of travel expenses related to the northern residents deduction, medical, and moving expenses and the deduction for meals by transport employees. All future changes to this amount will apply to foot and bicycle couriers and rickshaw drivers.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch