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A truck driver has won an appeal against an objection decision involving deductions for meal expenses.
Tribunal overturns decision on meal expense deductions
04 April 2025
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9 minute read
The Administrative Review Tribunal of Australia (ARTA) handed down its decision in Shaw and Commissioner of Taxation (Taxation) [2025] ARTA 224 last month, examining whether meal expenses that were claimed by a truck driver should be allowed in full.
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The applicant in the case was employed as a long-haul truck driver in Western Australia, driving long distances in the Pilbara and across the Nullarbor.
The driver initially claimed a deduction for meal expenses of $33,325 in the 2021 income year. This was amended to $32,782.50 by way of a voluntary disclosure.
The voluntary disclosure was because an error was made in the claim, as the wrong maximum reasonable daily allowance was initially applied.
The tribunal noted that the claim seemed to have been calculated by multiplying the number of days he was away from home by the maximum reasonable daily allowance, which was $105.75 in the voluntary disclosure. The driver was away for a total of 310 days.
The maximum reasonable daily allowances are set out under Taxation Determination TD 2020/5 Income Tax: What are the reasonable travel and overtime meal allowance expenses for the 2020/2021 income year? (TD 2020/5).
The driver said that he spent more than the maximum daily allowance in TD 2020/5 and claimed less due to the advice given to him by his tax agent.
According to the truck driver, the tax agent advised that if he claimed less, he did not need to keep records to substantiate his expenses.
He provided the Commissioner with details of his journeys away from home and set out the breaks he took.
This material included fatigue management reports or “fatigue diary” for the income year that he was required to maintain, which showed when breaks were taken. It also included bank statements for periods from 18 April 2020 to 16 April 2021.
In 2022, the Commissioner audited the 2021 income year and reduced the applicant’s claim deduction to zero.
A notice of amended assessment was issued on 27 June 2022, reducing his deduction to zero.
The truck driver objected to the amended assessment in January 2023.
In its objection decision issued in August 2023, the Tax Office allowed the objection in part, increasing his allowable deductions for meal expenses to $5,890 based on a review of his logbook, fatigue diary and bank statements.
This was an average of $19 per day multiplied by 310 – being the number of days the driver was away from home.
In its decision, the tribunal criticised the ATO’s allowance of $19 per day for meals as an “absurdly inadequate amount”.
“While the Tribunal appreciates that the Commissioner was seeking to assess the evidence to determine what could be substantiated, sensible tax administration is realistic,” tribunal general member Joanne Dunne said.
The tribunal said the Commissioner had significant amounts of data available such as the average grocery spends and that there were other available areas for investigation.
“The Commissioner could also have found credible submissions made to it accompanied by bank statements and other evidence, particularly where to do otherwise is to act so unrealistically,” it said.
The tribunal determined that the truck driver had incurred the disputed expenses in gaining or producing his assessable income.
“The Tribunal does not agree with the Commissioner that there is an insufficient linkage between the expenditure on bank statements and [the truck driver’s] work.”
It noted that the applicant’s evidence was credible and gave a broad mechanism for apportionment, and that basis could have covered many of the Commissioner’s concerns.
However, the tribunal warned tax agents adopting a similar approach to the truck driver’s tax agent to change their practice as it was not supportable at law.
“It is perfectly reasonable for the Commissioner to assess whether that claimed expenditure was incurred and there is a risk that the Commissioner will seek to do just that.”
Dunne cautioned that adopting this type of approach to meal deductions placed clients at risk of review by the Commissioner and at risk of penalties being imposed.
“Answering that by saying 'but you said in TD 2020/5 that substantiation was not needed', will get nowhere with the Commissioner as a practical matter,” she said.
The tribunal said this latest case was another in a long line of disputes involving truck drivers and work-related expenses.
“It is unfortunate to see this consistent issue arising for truck drivers. It suggests the need for further clarification and education.”
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