Meals allows allow you to claim meals expenses without keeping receipts, and the allowance the corporation paid you is not a taxable benefit.ROYinTO wrote: ↑Nov 21st, 2018 12:55 amI'm trying to understand how to handle meal expenses with respect to a government contract that pays a per diem meal allowance according to the national joint council schedule http://www.njc-cnm.gc.ca/directive/d10/ ... 2s98-tc-tm
To keep it simple, I want to look at a single meal. For example breakfast, I buy a coffee and bagel for $6.00 + $0.78 HST = $6.78
On my invoice I would include a breakfast meal allowance of $17.15 = $15.18 + $1.97 HST
In essence the difference between the 2 is profit.
Am I correct in thinking that when it comes time to file an HST return, the $0.78 is an ITC with the net HST payable as $(1.97 - 0.78) = $1.19?
In my bookkeeping, I would enter the $6.00 as an expense and the $15.18 as revenue earned.
What happens to the $6.00 expense @ Y/E. Does it get included in other meal expenses and subject to the 50% meals & entertainment reduction. Or because it is directly earning revenue do I allocate it to a separate expense account and claim the full $6.00 as an expense?
if for example you claim $10 meals allows from personal to the corporation, then the $10 becomes the expenses for the corporation and it is not a taxable benefit on personal. Corporation expense the $10 for meals expense, and this amount is tax included, meaning, net: $8.85 net, and $1.15 HST. and you follow the rule of 50% deductible for meals when prepare tax return.
if you claim receipts, then simiply whatever amount from the receipt and the corporation claim the expense based on the receipt.
Philip Kwok, CPA, CGA