During the Battle of Magersfontein in December 1899 Neilson and his men came under heavy fire from their right flank. He ordered his troops to attack the enemy position of 60 men, taking it at bayonet point in hand-to-hand fighting, capturing half and killing or wounding the other half. Neilson was also present during the action at Koodoosberg, the Battle of Paardeberg and the Battle of Poplar Grove, as well as the actions at Waternal, Houtnek, Bloemberg, Roodeport and Heilbron. He took part in the operations in the Transvaal and the actions at De Wagen Drift, Zilikats Nek and Olifant's Nek. For his services in South Africa Neilson was awarded the Distinguished Service Order (DSO) in 1900 for his gallantry in the actions at Modder River and Magersfonteinand and was twice Mentioned in Despatches.