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Wednesday, 7 January 2015

Do your travel to work expenses stand up to scrutiny?

Although there are differences between tax rules for self-employed and employed people, many of us are able to identify our travel to & from our normal place of work – the commute, as we call it, is not deductible for tax purposes.

However, until recently, HM Revenue & Customs has taken a very narrow and literal view of what is allowable work travel, and what amounts to “commuting” to or from home. The findings of two recent cases, however, could pose problems for you if you have both employment and self-employment.

     1.Commute allowable expenses tribunal case study

In the first case, a doctor worked partly for the NHS, and partly as a self-employed consultant, and travelled by car between his home, the NHS hospital and his private consulting rooms.

After an exhaustive and detailed analysis of his travel patterns, the tribunal eventually diagnosed that all of his travel to and from the NHS hospital, from his home to his consulting rooms, and between the hospital and his consulting rooms was not allowable for tax.
As such, his travel expenses were described as not having been incurred in the furtherance of his business, but rather arose from where he lived.

2. Case study for allowable work travel expenses

In the second case, a self-employed flying instructor claimed to be operating from his home and that his travel to the two airfields where he gave lessons amounted to business travel in the course of his trade.

The Tribunal decided that both airfields were his regular places of work and that no deduction was due for his travel to or from them.

Would your work travel arrangements stand up to inspection?


Both cases point to the fact that a person’s business or employment base is not always where they think it is. They demonstrate that HMRC and the Tribunals are making a greater distinction than in the past between travelling in the course of a business, and travelling to a place where their work is regularly carried out. 

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