Between peddling and running, rickshaw drivers and couriers expend a lot of energy during their work day, and the Canada Revenue Agency recognizes that these professionals need extra food to keep their energy up. In fact, one brave courier took this issue to tax court, and his argument was so compelling that the CRA decided to extend this deduction to all people in his industry as well as to the rickshaw drivers. If you have clients who are self-employed couriers or rickshaw drivers, let them know that they can claim costs related to the extra food they consume in a day.
The CRA lets taxpayers make this claim in two ways. As of 2018, your clients can claim a flat rate of $17.50 per day or the actual amount of extra food they eat in a day. With the flat rate, your clients don’t need receipts for the food. They just need proof they were working. Log books or dispatch slips are ideal.
If your clients want to claim more than the flat rate, they need receipts showing how much food they purchased. They also need to be able to prove how this amount exceeds the usual amount consumed by the average person in a day. For instance, if a courier consumed $30 worth of food in a day, he can’t necessarily claim $30 as a business expense. Instead, he can only claim the amount that is over and above what a typical person consumes in a day. If an average person consumes $10 in a day, this courier can write off $20. Note these are just sample numbers.
Helping your clients understand the importance of business deductions is part of your job as their accountant. The more deductions you help your clients find, the more valuable your services are to them. Remind couriers and rickshaw drivers of this extra deduction, and have them track their work days so they can claim the extra food they consume to fuel their bodies.