He drives the Pilbara and the Nullarbor six days a week and sleeps in his truck. The Commissioner allowed $19 a day for meals.
He drives through the Pilbara and across the Nullarbor. Six days a week. Sleeps in his truck. Breakfast costs $25 to $30. Lunch, $32. Dinner, up to $65.
The Commissioner allowed him $19 a day for meals [59]. Then appealed when the Tribunal overturned it. Then lost in the Federal Court on all seven grounds.
Commissioner of Taxation v Shaw [2026] FCA 197 (Colvin J, 4 March 2026).
The facts
Shaw claimed $32,782.50 in meal deductions for FY2021, the reasonable daily amount under TD 2020/5 across 310 nights away. At audit, the Commissioner reduced that to zero. At objection, $5,890. Just $19 per day, a figure the Tribunal called “absurdly inadequate” [59].
Shaw had no receipts. His tax agent told him he did not need them if he claimed within the Determination [39]. That advice was wrong [74]-[75]. But Shaw was credible [44].
How the Commissioner lost
- Substantiation is not deductibility. The Commissioner conflated the two. Colvin J held they are separate requirements [5]-[6], [17]-[18]. Division 900 deals with substantiation. Section 8-1 deals with deductibility. The s 900-50 exception removes the Division 900 burden for claims within the reasonable amount [25]-[26]. You cannot strip that away and demand the very evidence it was designed to excuse [40]-[41].
- The Commissioner’s position was internally inconsistent [71]-[73]. He publishes reasonable amounts, tells taxpayers through his own Ruling they can limit their claim to limit the paperwork [72], then audits a taxpayer who did exactly that and demands full substantiation of every meal.
- Precise apportionment was not required. The Commissioner insisted on line by line analysis of Shaw’s bank statements [109]. Colvin J rejected that. The Tribunal was entitled to rely on credible sworn evidence about eating habits, cash spending at roadhouses and weekly routine [111]-[114]. The granular apportionment demanded was not necessary [127]-[130].
- Section 900-200 was properly applied. Shaw’s tax agent gave wrong advice. The Tribunal said so [74]-[75]. But s 900-200 asks whether the taxpayer had a reasonable expectation that substantiation was not required, not whether the advice was correct [162]-[166]. The Federal Court agreed.
Why it matters
The Commissioner instructed Norton Rose Fulbright, briefed Senior Counsel, ran seven grounds and lost on every one. This was not a borderline case. It was a comprehensive rejection of the Commissioner’s approach to meal expense deductions for travelling employees.
This is not limited to truck drivers. Any employee on a travel allowance claiming meals within the reasonable amount should review their position. FIFO workers, sales staff, consultants, anyone travelling overnight for work.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.