Tax Deductions for Travel and Subsistence

HMRC continues to challenge travel and subsistence claims in personal tax returns, particularly where there is a question over whether journeys are genuinely for business purposes. Two tribunal cases illustrate how these rules are being applied in practice.

Trust me I’m a doctor

The first case concerns a medical consultant and is frequently cited in disputes over home-to-work travel for mixed employment and self-employment roles.

The consultant, based in London, carried out some self-employed work from home while also attending weekly outpatient clinics as an employee at two private hospitals.

The tribunal accepted that the taxpayer had workplaces at both hospitals, Parkside in Cheam and St Anthony’s in Wimbledon, and also undertook some work from home. However, it concluded that journeys from home to each hospital were ordinary commuting and not deductible.

The tribunal’s view was that these journeys were undertaken to reach a permanent workplace, rather than being incurred in the performance of his duties. As such, they failed the test for allowable expenses.

Taking flight

A second case involved a self-employed flying instructor who claimed travel costs between his home and two airports where he carried out his work.

The taxpayer in this case gives lessons and conducts examinations at airports in Bournemouth and Shoreham while also conducting work from his home although this is minimal.

His home is the address which is registered with the Civil Aviation Authority (CAA) and where he is contacted by the organisation. All new CAA materials which he is required to read as part of his business are sent to his home address and are also read on the premises. His home telephone number is listed on the CAA website and he can be contacted here for business however most of his enquiries do come through word of mouth.

The taxpayer also stores equipment like charts and navigation apparatus at his home although it is notable to this case that there is no designated office on the premises.

The tribunal found that the travel costs between his home and the airports were not allowable, as the journeys had a dual purpose and were not incurred wholly and exclusively for the purposes of the trade.

Although the flying instructor did work from home he had places of business at the two airports to meet, teach and examine students. Although some administrative tasks were carried out at home, the airports were the locations where his income-generating activities took place. Travel to those sites was therefore treated as ordinary commuting rather than business travel.