Doctor fails in his bid for tax deduction for travelling expenses

Doctor fails in his bid for tax deduction for travelling expenses

Mon 03 Feb 2014

In Dr Samad Samadian v HMRC [2014] UKUT 13 the Upper Tier Tribunal entirely confirmed the First Tier Tribunal’s (FTT) decision .The case concerned whether tax relief was available for the travelling expenses Dr Samadian incurred in travelling between different places of work, including his home.

Dr. Samadian was employed by the NHS and provided those services at two NHS hospitals. He also had a private practice (self-employment) which was based at his home but in which he regularly used bases provided in independent hospitals.  In the course of the private practice he provided regular sessions at the private hospitals as well as home visits to private patients and call-outs to see patients in the private hospitals.

The FTT ruled that Dr Samadian’s travel expenses were not deductible for the following journeys:

  • between the NHS hospitals and the private hospitals; and
  • ‘commuting’ between Dr Samadian’s home and the private hospitals for his regular sessions there.

Dr Samadian appealed on the basis of the decision in the earlier case of Horton . That case concerned a sub-contractor who worked at various temporary building sites but undertook the necessary administration from home. His travelling expenses from home to the various building sites were deductible.  However, Mr Horton’s home was the only fixed place of business he had.  The UTT contrasted this with Dr Samadian, who had ‘a pattern of regular and predictable attendance at specific locations other than his home (i.e. the private hospitals) in order to perform significant professional functions as a clinician’. 

The UTT considered it self-evident that if the activities of a taxpayer at his home are insufficient to constitute it as a place of business, his travel between his home and his place or places of business cannot be deductible.  The court held that Dr Samadian did have a place of business at his home but that in its own right was not sufficient to make the travelling expenses between home and other regular places of business deductible.  In order to be deductible for tax purposes, an expense must be incurred wholly and exclusively for the purposes of the business. 

Generally travel between the home-base and another regular place of business will not be deductible because of duality of purpose, the so-called ‘commuting’ principle. The UTT found there was a mixed purpose in Dr Samadian’s journeys: part of the reason for undertaking them was in order to maintain a private place of residence separate from the hospitals where he worked.  Travelling between NHS and private hospitals was not deductible as it merely put Dr Samadian in a position to perform his business; it was not actually part of doing his business. This contrasted with travel from one private hospital to another which was entirely for the purposes of his private practice.

While the UTT confirmed the FTT’s decision it added a small refinement in relation to travel between home and a regular place of self-employed business. Expenses are deductible for journeys for specific purposes between the locations undertaken solely in the course of business, e.g. to collect equipment or notes and return to where they are needed.

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