Chip formation during metal cutting involves high strain rates and large deformations. Under many conditions, the deformation is concentrated in narrow bands due to shear localisation from adiabatic heating. In order to understand the localisation process, it is necessary to increase the knowledge regarding the microstructural evolution during deformation. However, the deformation that occurs during chip formation is hard to measure. Therefore, this study utilises top-hat specimens deformed at high strain rates in order to generate localised shear bands in the Ni-based superalloy Alloy 718, with defined measurable deformation. The resulting shear bands in the top-hat specimens are compared with those generated in metal cutting chips and studied in order to characterise the deformation occurring at a microstructural level. The resulting microstructures in the top-hat specimens and machining chips are found to be similar, with heavily localised deformation into narrow shear bands and homogeneously sheared microstructure adjacent to the bands. The centres of the shear bands are heavily deformed with ultra-fine grains, indicating dynamic recrystallisation during the deformation. The results indicate that the shear deformation produced by high strain rate testing of top-hat specimens can provide an excellent means of replicating the conditions for shear localisation during metal cutting. However, care should be taken to design the tests so that the local conditions are representative in terms of strains and strain rates.