Travel costs – deductible or not deductible?

Published: 29 May 2014
Author: WebAdmin

The Samadian case outlines the key considerations when considering what relief is available for travel and when travel to work is not travel to work.

The Dr Samadian case, related to the tax deductibility of travelling expenses, went to the Upper Tribunal. He was working as a self-employed consultant as well as an employee for the NHS. He had claimed the costs of travelling between private clinics and NHS hospitals and between private clinics and his home.  The Upper Tribunal held that these journeys were not incurred ‘wholly and exclusively’ for the purposes of his self-employment and therefore the costs are not allowable.

The Tribunal noted that Dr Samadian works full-time in the NHS at two London hospitals, but also has a private practice as a self-employed medical practitioner. He has a home office and also consulting rooms he hires at two private hospitals to see patients. In addition, he also occasionally conducts home visits. He argued that he should be able to reclaim travel expenses for journeys between NHS and private hospitals, and between his home and private hospitals as they are, in his view, incurred wholly and exclusively for the purposes of his private practice.

The Upper Tribunal dismissed the appeal and found the First Tier Tribunal decision to be essentially correct. It ruled that the home office can be recognised as a place of business and a use of home claim allowed, but the travel from that place of business in the home will not necessarily be allowable, unless it is in pursuit of an ‘itinerant’ business journey.

The Upper Tribunal found that Dr Samadian’s home office was necessary to perform his work, but that the pattern of ‘regular and predictable attendance’ at other locations, like the private hospitals, meant that they were places of business.

The Tribunal provided guidance to support its decision and to provide advice going forward, which takes the form of four main points:

  • travel expenses for journeys between places of business for purely business purposes are treated as deductible
  • travel expenses for journeys between a location which is not a place of business and a location which is a place of business are not deductible
  • travel expenses for journeys between home (even where the home is used as a place of business) and places of business are treated as non-deductible (other than in very exceptional circumstances, such as if Dr Samadian were at one of the private hospitals preparing to see a patient, and he realised that he needed his notes on the patient but he had left the notes in his office at home and he made a special trip to go home to collect the notes, but immediately returned to the hospital to see the patient)
  • travel expenses are treated as deductible in relation to itinerant work (such as Dr Samadian’s home visits to patients).

The key issue seems to be whether a journey is habitual or itinerant, and this judgement will need to be made on a journey by journey basis. This means that it is vital to keep robust records of all business journeys undertaken.

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