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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