Commentary, cases and curiosities.

Federal Court — Cases

The Truck Driver Who Beat the ATO

In Commissioner of Taxation v Shaw [2026] FCA 197, a long-haul truck driver from Western Australia took on the ATO over his travel meal claim — and won both at the Tribunal and on appeal to the Federal Court. The reasoning is worth a moment for anyone paid a travel allowance.

Mr Shaw was away from home six days a week, slept in his truck, and either he or his wife did a “big shop” before each week on the road. He claimed the maximum reasonable daily amount from TD 2020/5 for each day he was away. On audit the ATO cut the deduction to zero; on objection it reinstated only $5,890, an average of $19 a day — a figure the Administrative Review Tribunal called “absurdly inadequate”.

The Tribunal restored the claim in full. The Federal Court (Colvin J) dismissed all seven grounds of the Commissioner’s appeal: the onus had not been reversed, the Tribunal had not applied a vague “reasonableness” test, and bad advice from a tax agent could still ground a reasonable expectation under section 900-200.

Three takeaways for anyone paid a travel allowance:

• Claiming within the Commissioner’s reasonable amounts is still the right move — the substantiation exception is alive and well.
• It is not, however, an automatic deduction. You still need to show the expense was incurred — bank statements, a logbook or fatigue diary will usually do it.
• Apportionment for any spouse / household share of the spend still matters.

Sources: ATO Decision Impact Statement; Commissioner of Taxation v Shaw [2026] FCA 197; 2026 ATC ¶21-002.

ATO Decision Impact Statement

Reading the Fine Print: The ATO’s Quiet Climbdown on Shaw

A week after losing in the Federal Court, the ATO published its Decision Impact Statement on Shaw (13 May 2026). The interesting parts are what the Commissioner is, and is not, accepting.

The headline concession is the ATO’s explicit acknowledgement that eligibility for a deduction under section 8-1 is a separate question from substantiation under Division 900 — two doors, not one. More usefully, the Commissioner has accepted that where a substantiation exception applies, auditors should not insist on the very records the exception was designed to spare the taxpayer from.

What the ATO is not accepting:

• Bank statements + oral evidence are not a free pass — the ATO is reserving the right to test the evidence case by case.
• Apportionment for private / household use still has to be done.
• Claiming within the reasonable amounts is not an automatic deduction.

Administratively, TR 2004/6 is now under review, a new Practical Compliance Guideline on work-related travel is being considered, and the annual TD setting reasonable amounts for 2026–27 will be updated in light of the decision. None of that changes how you should be claiming this year — but it is worth watching the space.

Sources: ATO Decision Impact Statement — Shaw (13 May 2026); TR 2004/6; TD 2020/5.