Taxation - deductions - employee truck driver - work-related expenses - relief from substantiation

Administrative Review Tribunal (Consequential and Transitional Provisions No.1) Act 2024 (Cth)

Income Tax Assessment Act 1997 (Cth) ss 8-1, 900-30, 900-50, 900-200

Taxation Administration Act 1953 (Cth) s 14ZZK

Davy v Commissioner of Taxation [2017] AATA 376

Duncan and Commissioner of Taxation [2024] AATA 974

Fardell v Federal Commissioner of Taxation [2011] AATA 725

Gleeson and Commissioner of Taxation [2013] AATA 920

Hill v Federal Commissioner of Taxation [2016] AATA 514

Re Carlaw and Federal Commissioner of Taxation 95 ATC 2166

Tyl v Federal Commissioner of Taxation [2017] AATA 2850

Australian Taxation Office Taxation Ruling TR 96/21

Australian Taxation Office Taxation Ruling TR 2004/6

Australian Taxation Office Taxation Determination TD 2020/5

"Average Grocery Bill | Australian Living Costs" - Canstar Blue, 2 September 2024 www.canstarblue.com.au/groceries/average-grocery-bill

Exposure Draft Legislation: Standard deduction for work-related expenses and the cost of managing tax affairs (2012)

1. This case is another in a long line of cases involving truck drivers and work-related expenses.[1] This case is about meal expenses. It is unfortunate to see this consistent issue arising for truck drivers. It suggests the need for further clarification and education.
2. The issues are:
   1. Whether Mr Shaw incurred the meal expenses claimed in the 2021 year ("Relevant Year") in gaining or producing his assessable income pursuant to section 8-1 of the Income Tax Assessment Act 1997 (Cth) ("ITAA 1997").
   2. Whether Mr Shaw is required to substantiate his expenses or is entitled to rely upon an exception from substantiation under section 900-50 of ITAA 1997.
3. Mr Shaw bears the onus of proof under section 14ZZK of the Taxation Administration Act 1953 (Cth) ("TAA") that the assessment is incorrect and what the assessment should have been.
4. For the detailed reasons set out below I have decided that the Commissioner's objection decision should be set aside, and the objection should be allowed.

1. Mr Shaw is employed by VPL Transport (WA) Pty Ltd as a long-haul truck driver in Western Australia.[2] He drives long distances including in the Pilbara and across the Nullarbor[3] and is away from home for considerable periods each year.
2. Mr Shaw is paid a travel allowance by VPL Transport (WA) Pty Ltd.[4]
3. Mr Shaw sought a deduction for meal expenses in the Relevant Year. Mr Shaw's initial claim for meal expenses in the Relevant Year was $33,325.
4. That claimed deduction was amended to $32,782.50 by way of a voluntary disclosure.[5] The voluntary disclosure was because an error was made in the claim as the wrong maximum reasonable daily allowance was initially applied.[6]
5. Mr Shaw's case is that the Commissioner's objection decision and related amended assessment is incorrect as the meal expenses he claimed should be allowed in full. This means an additional $26,892.50 should be allowed.
6. Mr Shaw's claim seems to have been calculated by multiplying the number of days he was away from home (310) by the maximum reasonable daily allowance (being $105.75 in the voluntary disclosure) 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").[7]
7. Mr Shaw says he spends more than the maximum reasonable daily allowance in TD 2020/5, and he claims less than he spends because of the advice given to him by his tax agent. The tax agent's advice was that if he claimed less, he did not need to keep records to substantiate his expenses.[8]
8. Mr Shaw provided the Commissioner details of his journeys away from home and set out the breaks he took. This material included fatigue management reports ("fatigue diary") for the Relevant Year that he was required to maintain which showed when breaks were taken.[9] It also included bank statements for periods from 18 April 2020 to 16 April 2021.[10] In cross-examination of Mr Shaw, Ms Dubey elicited further information, including that the fatigue diary does not say when meals are taken, just when there are breaks, and that meals are irregular.[11] The Tribunal takes this cross-examination as suggesting the materials provided by Mr Shaw were not specific enough from the Commissioner's perspective.
9. Mr Shaw says he was away from home for 331 days in the Relevant Year and not 310.[12] There has been no amended return filed by Mr Shaw claiming expenses for the extra 21 days, and that issue is not dealt with in the objection decision which is the reviewable decision in this case. On instructions, Ms Dubey said that the Commissioner took the position at the hearing that it does not necessarily accept that aspect. This seemed strange as the Commissioner appeared to accept that 331 days were spent away from home in the Commissioner's SFIC at [11] and evidence has been provided to that effect by VPL Transport (WA) Pty Ltd.[13] Despite those earlier references, the Tribunal understood the Commissioner's position to be that the extra 21 days remain in factual controversy (for example, the fatigue diary or other logbook references needed to be checked) and the Commissioner wished to consider the facts further.[14] The Tribunal understands this position.
10. For reasons of unresolved controversy and because no claim in a tax return has been considered by the Commissioner, the extra 21 days and the potential for a greater claim by Mr Shaw is not dealt with in this decision. I deal only with the claim made in Mr Shaw's return for 310 days away from home and the objection decision at issue. While it is unhelpful to have this situation with Mr Shaw not knowing the position for the extra 21 days, it may be of little practical difference at the end of the day. The parties will need to separately liaise regarding that aspect following this decision being issued and, assuming that the Commissioner is satisfied as to the extra 21 days being spent away from home, the Tribunal suggests those days are managed consistently with this decision.
11. In 2022 the Commissioner audited the Relevant Year, culminating in the Commissioner reducing Mr Shaw's claimed deduction to zero.[15] A Notice of Amended Assessment was issued on 27 June 2022 reducing Mr Shaw's deduction to zero.[16]
12. Mr Shaw objected to the Amended Assessment on 31 January 2023.[17] The objection covered other expenses (such as mobile phone expenses) that are not at issue in these proceedings and are not mentioned further in these reasons as a consequence.
13. The Commissioner issued its objection decision on 4 August 2023[18] allowing Mr Shaw's objection in part and increasing Mr Shaw's 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 Mr Shaw was said to be away from home.[19] The Commissioner said that from Mr Shaw's bank statements and fatigue diary, on average, Mr Shaw incurred expenses of $5 for breakfast, $5 for lunch and $9 for dinner.[20]
14. A Notice of Amended Assessment was issued on 11 August 2023 to give effect to the Commissioner's objection decision.[21]
15. Mr Shaw filed proceedings in this Tribunal[22] on 21 February 2024.[23]

Mr Shaw's evidence before the Tribunal

1. Mr Shaw gave evidence at the hearing. I found him to be a credible and honest witness. Put simply, I believed him, and this was because his evidence made practical sense.

2. Mr Shaw's evidence,[24] in summary, was:

   1. Mr Shaw is away from home for considerable periods each week - generally, 6 days every week. He sleeps in his truck.

   2. He drives long distances through remote parts of Australia, and often there are no available food outlets.

   3. Where there are outlets, this is usually a roadhouse or service station, and the food options are not always as healthy as would be desirable. If he is passing through a town, he may buy further groceries at an available supermarket.

   4. Mr Shaw maintains about $1,500 in cash in his truck to pay for costs on his route as there may be no available banking facilities or EFT-POS. He uses that cash to purchase food at outlets where he wishes to when taking a break from driving as well as pay for anything such as oil or other items for his truck.

   5. Mr Shaw gave examples of costs for food he may purchase at outlets on his transport route:

   6. Breakfast including coffee is about $25-$30;

   7. Lunch - a pizza is about $32;

   8. Dinner can be up to $65.

   9. To ensure he does not have to rely on food outlets given the remote areas he drives through, Mr Shaw has a freezer in his truck and a hot plate so he can prepare his own meals. He and his wife, Ms Fisher, ensure that he has sufficient available food in his truck to meet his needs.

   10. Mr Shaw said that the habit is for a 'big shop' to be done on a Monday or sometimes a Sunday to ensure his truck is fully stocked each week before he goes on the road on a Monday. Mr Shaw said generally that he buys food, or he transfers funds to Ms Fisher, and she buys the food. Only Mr Shaw has access to his bank account. The Tribunal comments that for Mondays, as Mr Shaw will be aware, his claim should only be for the meals once he is on the road.[25]

   11. Mr Shaw said that the big shop was usually at the IGA or at the Coles. Mr Shaw also said he makes sure he has items such as paper towels, toilet paper and the like available to him in his truck. Mr Shaw also accepted that some of the big shop may include such items.

   12. Sometimes, Ms Fisher acquires additional food as part of the big shop or during the week when Mr Shaw is away. This is stored in the freezer at home so Mr Shaw can load it in his truck for the next week. This means that sometimes Mr Shaw transfers funds to Ms Fisher during the week. This is because there are some favourite foods that Mr Shaw likes to have available, and these are stocked up on occasion as they may otherwise be unavailable when Mr Shaw wants them. Those foods are then loaded into his truck freezer on a future trip.

   13. Mr Shaw candidly acknowledged on cross-examination by Ms Dubey that he does not ask, and it is possible that Ms Fisher uses some of the funds he transfers to her for herself or the household. This acknowledgement was to his credit. Mr Shaw described this as potentially $50 here and there but he was not certain. He also said Ms Fisher knows that the funds he transfers to her are for the big shop and for his meals while on the road as he told her as much.

   14. The Commissioner says that the events described by Mr Shaw cannot be the case, and the bank statements demonstrate regular expenditure in Perth, beyond Mondays or Sundays.[26] While the Tribunal understands this submission, this is an issue to be cross-referenced against the fatigue diary and work records to demonstrate when Mr Shaw was on the road and when he was not. When looking at those records, this does not, of itself, undermine Mr Shaw's case on meal expenses.

   15. The Commissioner criticised Mr Shaw for not being able to itemise what was purchased and questions were asked on cross-examination about expenditure in 2020.[27] The Tribunal considers that line of questioning did not assist the Commissioner. The Commissioner must act with some realism. Mr Shaw cannot recall specific shops from five years ago (as he said). He also thought he would not have to substantiate specifically what was purchased, as a result of TD 2020/5.[28]

   16. The Tribunal is also of the view that questions about why certain big shops were split into multiple amounts on Mr Shaw's bank statements, sometimes merely minutes apart,[29] did not assist the Commissioner. This appears to be an EFT-POS issue managed by the shop in question or a bank issue. It is hard to know, and as Mr Shaw said, he could not say anything about bank processing issues.[30] In any event, this was certainly not determinative of the questions before the Tribunal.

   17. In cross-examination by Ms Dubey, Mr Shaw advised that while Ms Fisher is not employed[31] other than in managing the Shaw/Fisher household, she receives child support from her former partner[32] and maintains her own bank account. He also advised that one of Ms Fisher's children is about 18 years old and employed. The 18-year-old was said to contribute to the Shaw/Fisher household at the time.[33]

   18. Mr Shaw said he spends more than $105.75 (the maximum reasonable daily amount) on food during his trips away, but only claims that capped amount. His tax agent told him that he did not need to substantiate his expenses if he claimed the lower figure in TD 2020/5, which was lower than his actual expenditure.

   19. Mr Shaw also described the administration that he is required to do on his trips which include the fatigue book and the fuel book, and complained there was too much paperwork altogether already.[34] It was attractive for him to not have to substantiate meal expenses as well.

STATUTORY PROVISIONS AND RELEVANT RULINGS

1. The statutory provisions and relevant rulings have been canvassed in full in a number of cases - including in Duncan v Commissioner of Taxation [2024] AATA 974 ("Duncan") at [12]-[16] and in Gleeson v Commissioner of Taxation [2013] AATA 920 ("Gleeson") at [11]-[24].[35] I broadly adopt that analysis to the extent it is relevant to the Relevant Year, and I set out the statutory framework in brief summary below.

2. Section 8-1 of the ITAA 1997 provides that a loss or outgoing can be deducted to the extent that it is incurred in producing assessable income or necessarily incurred in carrying on a business for the purpose of gaining or producing assessable income. In this case, the Commissioner accepts that food and drink expenses incurred by Mr Shaw while away from home on a work journey would be deductible.[36] However, paragraph 8-1(2)(b) of the ITAA 1997 provides that a loss or outgoing of a private or domestic nature cannot be deducted. This is the Commissioner's complaint in this case.

3. Subdivision 900-B of the ITAA 1997 sets out substantiation requirements for work expenses. In short:

   1. A "work expense" is defined in subsection 900-30(1) of the ITAA 1997 as a "loss or outgoing you incur in producing your salary and wages" and also includes a "travel allowance expense" (per subsection 900-30(2) of the ITAA 1997).

   2. A "travel allowance expense" is a loss or outgoing for accommodation, food, drink or incidental to travel and which is covered by a "travel allowance" - per subsection 900-30(2) of the ITAA 1997.

   3. Subsection 900-30(3) of the ITAA 1997 provides that a "travel allowance" is provided by an employer to cover losses or outgoings incurred for travel, food or drink away from the ordinary residence of the taxpayer and undertaken in the course of the taxpayer's duties to the taxpayer's employer. There is no dispute in this case that there is a travel allowance paid to Mr Shaw by his employer VPL Transport (WA) Pty Ltd.

   4. While section 900-15, section 900-20 and section 900-25 of the ITAA 1997 describe the substantiation requirements for such expenses, section 900-50 provides an exception for incurred in Australia. Subsection 900-50(1) provides that substantiation is not required for travel allowance expenses "".

Employee truck drivers who receive a travel allowance

72. An employee truck driver who, in the course of earning his or her income, is required to sleep away from home, is considered to be travelling for work and may incur meal expenses as part of a work-related travel expense. Truck drivers generally do not incur accommodation expenses when travelling for work, as they sleep in their truck. Accommodation expenses incurred as part of work-related travel must be substantiated with written evidence as described in Subdivision 900-E of the ITAA 1997. The Commissioner sets out each year the reasonable amounts for food and drink expenses incurred by employee truck drivers as part of a travel allowance expense.

1. In addition, Taxation Ruling 95/18 Income tax: employee truck drivers allowances, reimbursements and work-related deductions ("TR 95/18") is also relevant - particularly [166]-[217], which deals with truck drivers and travel/meal expenses.[37] At [202] the Commissioner says that if a travel allowance is received, expenses must be incurred and if the claim is no more than the reasonable amount no substantiation is required.
2. These rulings are considered further below.

REASONS FOR DECISION

Unattractive aspects of this case

1. Before commencing with legal analysis, the Tribunal records that both parties in this matter presented aspects of their respective cases in an unattractive manner. I comment on those features below.
2. For the Commissioner, the objection decision allowed $19 per day for Mr Shaw's meals while on the road. This is, in the Tribunal's assessment, 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. I put this reaction to the Commissioner at the hearing, and Ms Dubey said the Commissioner was willing to reconsider $19 and told Mr Shaw it would do so if substantiation could be provided.[38] That seemed to me to be saying that the Commissioner was not willing to move from this position as the point of principle was substantiation. The Commissioner also suggested Mr Shaw had aggregated meal expenses or "moved" meals contrary to TD 2020/5.[39] It is unclear how the Commissioner has concluded this as being "clearly" the position. The Commissioner also said that Mr Shaw did not provide a methodology to apportion or estimate the expenditure he incurred.[40] The Tribunal believes the Commissioner could have determined a methodology from the evidence provided.[41] The Tribunal appreciates that the difficulty for Mr Shaw is that without full substantiation, which he thought was not required, it seemed difficult to convince the Commissioner as to an apportionment methodology.[42]
3. The Tribunal is not sure how the Commissioner thinks anyone would fund three meals a day for $19 in the Relevant Year, let alone for an individual of Mr Shaw's stature.[43] The Commissioner has a lot of data available (for example of average grocery spends) and there were available areas for investigation.[44] 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.[45] The Commissioner also should have considered the impact of section 900-200 of the ITAA 1997 on this case.
4. Ms Dubey (for the Commissioner) also said at the hearing that where the maximum reasonable daily allowance in TD 2020/5 is claimed as the expense, but more is said to have been spent (as is the case for Mr Shaw), the taxpayer must provide substantiation for all expenses.[46] The Tribunal rejects that submission. The Commissioner's reference to [74] of TR 2004/6 in its Closing Submissions[47] does not support that submission. Paragraph 74 is applicable where the amount claimed by the taxpayer is in excess of the maximum reasonable daily allowance. That is specifically what the wording says.
5. The context of TR 2004/6 as a whole must be considered, as the Commissioner's reliance on [74] would otherwise be contrary to TR 2004/6 at [14]: "Each taxpayer can decide between maintaining fewer records and limiting a claim to the reasonable amount, which in some cases may be lower than the amount actually incurred or keeping written evidence and claiming the full amount of deductible expenses incurred, which may be higher than the reasonable amount." This was an unfortunate inconsistency in the Commissioner's position before the Tribunal. I take TR 2004/6 at [14] as the Commissioner's position. It is what is claimed that is important when determining issues of substantiation, not what could be claimed.[48] It is perfectly legitimate to limit the claim, to limit the paperwork.[49]
6. For Mr Shaw, the T documents demonstrate that Mr Shaw's tax agent's approach was overtly stated to the Commissioner as being equal to the number of days away multiplied by the maximum reasonable daily allowance in TD 2020/5.[50] The Commissioner treated this as a suggestion that there is a standard deduction for truck drivers. It is unsurprising that the Commissioner did not react favourably to that. The Tribunal reminded Mr Wytkin of events some years ago where the Gillard government sought to change the work-related expense provisions to provide a standard one‑off deduction for all taxpayers from 1 July 2012.[51] That was never enacted and is not the law. Mr Wytkin made some submissions about what the Commissioner's role was when TD 2020/5 applied. My assessment of those submissions was that he was saying that while Mr Shaw did incur the expenditure, TD 2020/5 provided authorisation for the standard deduction approach that had been adopted. TD 2020/5 is about substantiation, and it does not provide a one-off set deduction for truck drivers and there is no statutory provision providing for that. TD 2020/5 also says as much.[52]
7. If a tax agent in Australia takes a similar approach to Mr Shaw's tax agent in the context of TD 2020/5, they should change their practice as that is 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. This case demonstrates that, as do other cases, including Duncan at [22], Davy v Commissioner of Taxation [2017] AATA 376 at [27], [39] and Fardell v Federal Commissioner of Taxation [2011] AATA 725 at [35].[53] Clients are 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.
8. I also comment on Mr Wytkin's submission that "[i]t is not open to an officer of the Australian Tax[ation] Office to determine a reasonable amount different to the published yearly Taxation Determinations."[54] This is a fundamental misunderstanding of what the Commissioner has done in this case. The Commissioner is assessing what it believes can be demonstrated as having been incurred; it is not changing its Taxation Determination, nor the reasonable amount set in TD 2020/5. This kind of submission is reflective of an idea that there was some sort of automatic deduction available to truck drivers which is not the position.
9. The Tribunal understands how the Commissioner's position appears inconsistent to truck drivers. Particularly, how can there be rules set by the Commissioner saying no substantiation is needed, and then for the Commissioner to ask for substantiation? Records obviously would not have been kept. Mr Wytkin complained[55] that TD 2020/5 reflects that the Commissioner had changed its requirements in Determinations over time and pointed out the legislation had not changed. This is true, but the Tribunal has no criticism of the Commissioner in that regard. The Commissioner sets Determinations each year and is entitled to do so. Any inconsistency between TD 2020/5 and the Commissioner's position in this case is due to the competing aspects of the Commissioner's job in this space. Of course, it is not clear there is any inconsistency anyway, given the terms of TD 2020/5.
10. The Commissioner is required to do two things. The Commissioner is required to both say what a reasonable amount is and determine whether the expenditure has really been incurred. As is described below, the Commissioner tried to signal that balance in TD 2020/5. I suspect the Commissioner will particularly want to consider whether the expenditure has been actually incurred by a truck driver if the maximum reasonable daily amount in TD 2020/5 (or the equivalent annual determination) is consistently claimed by a taxpayer. In testing that issue, the Commissioner needs to act sensibly, and consider the substantiation provided by the taxpayer taking into account what was said in TD 2020/5 and section 900-200 of ITAA 1997 - it is a balancing exercise for the Commissioner.
11. From a practical perspective, a well-advised truck driver claiming the maximum reasonable daily amount (or in fact any amount) would maintain full substantiation of meal expenses for a short period in each year when relying upon TD 2020/5. That is what is said in TD 2020/5.[56] That material could comprise receipts of meals and receipts showing the specific groceries acquired for the trip, clear evidence of food acquired being in the truck (e.g., phone photos), bank statements and diaries to demonstrate periods away from home, meal breaks etc for a short period in a year. What would be sensible for that short period is maintaining sufficient material to clearly demonstrate that the regular spend is at, or more than, the Commissioner's maximum reasonable daily amount, if the truck driver is claiming that maximum reasonable daily amount. That would also enable a tax agent and the Commissioner to be confident that the claim amount has been incurred.
12. Otherwise, a truck driver risks facing a case such as this one. This risks that driver incurring associated advisory and productivity costs and having potential requirements to give evidence and be subjected to cross-examination, with the risk that their evidence would not be accepted. Tax agents should not take this case as meaning their truck driver clients would also succeed where Mr Shaw has in this case. In addition, the Tribunal encourages Mr Shaw to adopt the above position for future years. If he does not, the outcome of this decision may not be repeated for future years.
13. I also comment in passing about Mr Wytkin's comparative between truck drivers and public servants when it comes to meal expenses.[57] While I understand the relevance of that from an historical perspective in terms of the legislation, I do not believe this submission assists Mr Shaw to meet his burden of proof in the Relevant Year. In the Relevant Year taxpayers in different roles have different applicable rules.

Whether Mr Shaw incurred the expenses claimed in the Relevant Year in gaining or producing his assessable income

1. In the Commissioner's Outline [24] the Commissioner accepts that:

   1. Food and drink expenses incurred by Mr Shaw while away from home on a work journey would be deductible;[58] and

   2. Mr Shaw was away for 310 nights in the Relevant Year.[59]

   3. As was noted above, there is also no dispute that a travel allowance was paid to Mr Shaw.[60]

   4. The Commissioner is correct that amounts must be incurred in gaining or producing his assessable income before an expense can be claimed under section 8-1 of the ITAA 1997.[61] The Commissioner's complaint is that Mr Shaw has not been able to demonstrate that his claim is for entirely work-related expenses, as opposed to food acquired for private purposes.[62]

   5. The Commissioner also says that Mr Shaw has not provided "clear, contemporaneous or corroborative evidence as to the fact the Disputed Expenses were actually incurred in gaining or producing assessable income".[63] The Commissioner dismisses the bank statements as they do not connect the expenditure to Mr Shaw with any specificity.[64] The Commissioner goes further, suggesting that Mr Shaw's evidence should be treated with caution as it could be construed as self-serving.[65] The Commissioner suggests that an inference could be drawn from the shops undertaken by Mr Shaw that they were also for private purposes.[66]

   6. Mr Wytkin for Mr Shaw took a different view, submitting at the hearing that it was obvious Mr Shaw incurred the expenditure[67] as he had demonstrated when he was on the road, he had to eat to live, Mr Shaw had described his food habits, and explained the withdrawals from his account and Ms Fisher's role in purchasing food.[68] Mr Shaw had given sworn evidence. Mr Wytkin noted that the Commissioner had accepted $5,890 of expenditure at small outlets such as service stations, without determining whether other items were purchased, with the inference of inconsistency in the Commissioner's position.[69] Mr Wytkin suggested that what the Commissioner was really seeking to do was walk back TD 2020/5.[70] I agree with aspects of Mr Wytkin's submissions. I do not believe the Commissioner has the balance right in this case, taking TD 2020/5 and section 900-200 of the ITAA 1997 into account. Mr Shaw had a reasonable expectation that TD 2020/5 would be applicable.

Whether Mr Shaw is required to substantiate his expenses or is entitled to rely upon an exception from substantiation under section 900-50 of the ITAA 1997

1. Section 900-50 of the ITAA 1997 provides that "if the Commissioner considers reasonable the total of the losses or outgoings you claim for travel covered by the allowance" there is relief from the substantiation provisions in Subdivision 900B.
2. When considering the exception to substantiation provisions (and following the analysis adopted in Duncan at [15]):

1. TD 2020/5 provides at [2] that it only applies where the employer has provided an allowance. There is no dispute in this case that a travel allowance was paid by VPL Transport (WA) Pty Ltd. 2. I have also determined he incurred this expenditure in gaining or producing his assessable income. 3. Mr Shaw's expenditure also falls within the limits of TD 2020/5. 4. There is no dispute that the expenses incurred by Mr Shaw were "covered by" the travel allowance.

1. For those reasons, the exception to the substantiation provisions apply to Mr Shaw. 2. Even if I am wrong about any aspect of the analysis in paragraph ‎52, I also find that Mr Shaw had a reasonable expectation that TD 2020/5 would apply due to the advice received from his tax agent. I find that section 900-200 of the ITAA 1997 would have applied to relieve Mr Shaw from the obligation to substantiate his meal expenses i[74]any event.74

CONCLUSION

1. For those reasons:
   1. The Commissioner's objection decision is set aside, and substituted with a decision that allows Mr Shaw's objection in full; and
   2. The Commissioner's Amended Assessment dated 11 August 2023 is excessive as an additional $26,892.50 expenses should be allowed.

1. I certify that the preceding 55 (fifty-five) paragraphs are a true copy of the reasons for the decision herein of General Member J. Dunne.

........................[SGD]..................................

Mr R Wytkin and Mr G Emmons, C Pope & Associates Pty Ltd

Australian Taxation Office, Litigation and Legal Services

[1] For example - Case 1/93 93 ATC 101; Case 9/96 96 ATC 186; Case 13/96 96 ATC 210; Davy v Commissioner of Taxation [2017] AATA 376; Duncan and Commissioner of Taxation [2024] AATA 974; Fardell v Federal Commissioner of Taxation [2011] AATA 725; Gleeson and Commissioner of Taxation [2013] AATA 920; Re Carlaw and Federal Commissioner of Taxation 95 ATC 2166; Tyl v Federal Commissioner of Taxation [2017] AATA 2850.

[2] Applicant's Statement of Facts, Issues and Contentions dated 31 October 2024 ("Applicant's SFIC") [1]. Respondent's Statement of Facts, Issues and Contentions dated 4 October 2024 ("Commissioner's SFIC") [7].

[4] T33. Commissioner's SFIC [10]; Applicant's SFIC [2], [4].

[7] Respondent's Outline of Submissions dated 17 February 2025 ("Commissioner's Outline") [6]. T31, 213-217, Applicant's SFIC [8]-[9].

[11] Transcript 12-13, [45] - [17].

[12] T24, 194. This would suggest the claim would have been $105.75 x 331 = $35,003.25, less the amount allowed in the objection decision $5,890 = resulting in expenses in dispute of $29,113.25.

[14] Transcript 2, [10] and following.

[19] Applicant's SFIC [10]. Commissioner's Outline [9b]. T2,6 [20].

[20] T2, 6 [20]. Applicant Submission - Outline Notes dated 11 February 2025 (Applicant's Outline) [22]-[24] reflects that Mr Wytkin could not work out how the Commissioner calculated this figure, and [100]-[110] sets out Mr Wytkin's attempted analysis (set out in Appendices) to demonstrate the inadequacy of $19.

[22] On 14 October 2024, the Administrative Appeals Tribunal became the Administrative Review Tribunal. Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 proceedings that were not finalised before 14 October 2024 are continued and finalised by the Administrative Review Tribunal. Anything done in relation to any such proceeding before 14 October 2024 is taken to have been done by the Administrative Review Tribunal.

[24] Transcript 9, [5] and following.

[25] Consistent with Davy v Commissioner of Taxation [2017] AATA 376, [42].

[26] Transcript 3, [41] and following. Respondent's Closing Submissions dated 12 March 2025 ("Commissioner's Closing Submissions"), [16].

[27] For example, Transcript 16, [30] and following. Commissioner's Closing Submissions [14].

[28] Transcript 17, [17] and following.

[29] Transcript 16, [9] and following. Commissioner's Closing Submissions [16].

[35] In this case, the Commissioner sought to rely upon Duncan and Mr Shaw sought to rely upon Gleeson, so those cases are considered in particular in this decision.

[36] Commissioner's SFIC [31]. Commissioner's Outline [24]. There is no suggestion that Mr Shaw's employer did not require him to be away from home (as was the case, for instance, in Hill v Federal Commissioner of Taxation [2016] AATA 514).

[37] Also relevant is TR 95/18 paragraphs [157]-[217] which summarises the applicable legislative provisions and also provides some examples applicable to truck drivers.

[39] Commissioner's Closing Submissions [17]. The suggestion is that (for example) Mr Shaw moved allocation for dinner to cover overspend at lunch.

[41] See for example footnotes 44 and 45 below.

[42] This is demonstrably the case from the Commissioner's Closing Submissions at, for example [14f], where Mr Shaw was criticised for not being able to identify amounts for each meal for the Relevant Year.

[43] No disrespect to Mr Shaw is intended. This concern is consistent with Mr Wytkin's submissions - Transcript 28, [6] and following.

[44] The Commissioner considers issues like living expenses (including grocery expenditure) in an array of different contexts, and there is available data of average spends: for example 2 September 2024 Average Grocery Bill | Australian Living Costs - Canstar Blue . The Commissioner could have investigated and considered costs at the outlets on Mr Shaw's route in the Relevant Year.

[45] Alongside the areas of investigation noted above, taking into account the evidence of Mr Shaw, the Commissioner could have taken the payments made to Ms Fisher on Saturdays, Sundays and Mondays as for the purchase of food for the truck, ignored the rest of the transfers made by Mr Shaw to Ms Fisher, and reduced each of those payments received by Ms Fisher by $50 to allow for potential private expenditure. That would overstate that potential private expenditure in all likelihood and understate food expenditure (particularly by ignoring all other transfers to Ms Fisher). An estimated amount of expenditure using the cash in the truck could have been considered - for example $300-$500. Then all small expenditure at service stations, roadhouses and food outlets on the bank statements added up for each trip away. When that sort of method is followed it can be seen that Mr Shaw spends above the maximum reasonable daily allowance. The Commissioner may have considered requesting (formally if necessary) a short period of full substantiation currently to cross check before determining the question.

[46] Transcript 37. This seems inconsistent with the Commissioner's Outline at [37]. Mr Wytkin also made submissions - Transcript 38-39.

[47] Commissioner's Closing Submissions [10].

[48] As Mr Wytkin points out this is also consistent with the legislative scheme: Applicant Closing Submission dated 7 March 2025 ("Applicant's Closing Submissions") [12]-[17]. It is also consistent with the other rulings at issue - for example TR 95/18 [202].

[49] This is consistent with the case law - for example Tyl v Federal Commissioner of Taxation [2017] AATA 2850, [33], [49] the entire expense claim by a truck driver needed substantiation only because more than the maximum reasonable daily allowance was claimed. The same was the case in Davy v Commissioner of Taxation [2017] AATA 376. TR 95/18 at [202] (as cited in the Commissioner's Closing Submissions at [11]) also supports that position - the focus is on the claimed amount.

[50] For example, T31, 213-217, Applicant's SFIC [8]-[9].

[51] Exposure Draft Legislation: Standard deduction for work-related expenses and the cost of managing tax affairs 2012, and Press Release No.026 8 May 2012.

[52] TD 2020/5 [3]. TR 96/21 also [7], [28]. In addition, in Duncan Mr Duncan's counsel made a courageous submission that there was an automatic deduction available to Mr Duncan at a consequence of TD 2020/5. This was rejected at [21], properly in my view.

[53] Also noted in the Commissioner's Outline [33].

[54] Applicant's Closing Submissions [8].

[56] For example, see TD 2020/5 [25], [29], [30].

[59] Commissioner's Outline [24]; but also see paragraph ‎13 above and the Commissioner's SFIC at [11] suggesting the Commissioner may accept a higher number of days away.

[60] Unlike the position in Fardell v Federal Commissioner of Taxation [2011] AATA 725, [63]-[64].

[61] Supported by Fardell v Federal Commissioner of Taxation [2011] AATA 725, [43].

[62] Commissioner's Outline [25], Commissioner's SFIC [28].

[64] Commissioner's SFIC [27]. Commissioner's Closing Submission.

[65] Commissioner's Closing Submissions [15].

[66] Commissioner's Closing Submissions [15].

[67] Applicant's Closing Submissions [6].

[68] Applicant's Closing Submissions, [3]-[5].

[70] Applicant's Closing Submissions [28].

[73] See footnotes 44 and 45 above. As an example of how the Commissioner's concerns could have been covered, monetary transfers to Ms Fisher could have been disregarded unless they were made close to the day of the "big shop" (a Sunday or Monday).

[74] I agree with the analysis in Gleeson at [62]-[63] in this regard.