An interesting piece in the BKN bulletin - 28 Feb 2013.
'If you are self-employed book-keeper you may have a number of customers you go to regularly to work at their premises. This could also apply to mobile hairdressers, cleaners, gardeners, and even medical professionals who work at private clinics. The miles you drive to reach each of your customers from your business base are used to calculate the amount of travel expenses you claim in your business accounts.
This is all good, but the Taxman has recently argued in a tax case that where the business is based at the person's home, that home-office can't be treated as the starting point for travel when the work is performed almost entirely at customers' properties. The Taxman has particularly challenged travel expenses claimed by doctors who work at private clinics and do not see patients at their home-office. The Taxman has tried to ignore the necessary preparation and report writing work the doctor has to perform at his home-office.
Which case was it argued in and what was the outcome? I work for quite a large number of self-employed contractors who can be moved from site to site on short term contracts but tend to be at one location for a number of days - their homes are their offices but would fall in to the part - work is performed almost entirely at customers' properties and do not see patients [read clients] at their home-office.
I assume that the case referred to is Dr Samadian V HMRC
To my mind this is nothing new as the hospital that he travelled to was his regular place of work so falls under the home to work rules.
Yours would come under the 24 month rule (see EIM32132).
Nothing new in this one it's just HMRC have won a case so they may start chasing the borderline cases now that they have that win under their belts.
HTH,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Now the worrying thing about reading that is that apparently accountants have been charging to travel into their own offices because they also have an office at home!
A case of do as I say not as I do methinks.
Personally I have an home office and a proper one and have never charged mileage between them but once at my offices have no qualms about charging 45p/25p per mile to client sites.
Any clients who work away travel from home to a temporary workplace within the remit of the 24 month rule so would not be caught by this.
I'm not seeing any major change here just application of the rules as they should have been applied anyway.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Shamus Many thanks for the reply, and, having had a quick look at EIM32132, all the contractors who I work with would be classed as short term workers and none would be at a location for more than 6-8 months let alone 24.
An interesting piece in the BKN bulletin - 28 Feb 2013.
'If you are self-employed book-keeper you may have a number of customers you go to regularly to work at their premises. This could also apply to mobile hairdressers, cleaners, gardeners, and even medical professionals who work at private clinics. The miles you drive to reach each of your customers from your business base are used to calculate the amount of travel expenses you claim in your business accounts.
This is all good, but the Taxman has recently argued in a tax case that where the business is based at the person's home, that home-office can't be treated as the starting point for travel when the work is performed almost entirely at customers' properties. The Taxman has particularly challenged travel expenses claimed by doctors who work at private clinics and do not see patients at their home-office. The Taxman has tried to ignore the necessary preparation and report writing work the doctor has to perform at his home-office.
Which case was it argued in and what was the outcome? I work for quite a large number of self-employed contractors who can be moved from site to site on short term contracts but tend to be at one location for a number of days - their homes are their offices but would fall in to the part - work is performed almost entirely at customers' properties and do not see patients [read clients] at their home-office.
I don't think your self employed contractors will have too much to worry about.
In the case in question, the mileage disqualified was for 'habitual' journeys made to private clinics where the health practioner carried the examination of his patients.
The panel deciding in the Upper Tier Tribunal used the decision in the case of Mallallieu v Drummond as the basis of their decision where the expense of clothing was not wholly and exclusively for the purposes of the trade because there was a dual purpose (i.e. dressing appropriately for the business AND being clad and warm) one of which did not have a business purpose, even if one of the purposes was unconscious.
In the case to hand, the travel had a dual purpose:-
a. the conscious purpose of going to the private clinics to perform examinations;
b. the unconscious purpose of maintaining his home separate from the private clinics.
It appears to me that the only travel that would be disallowed would be where a trader keeps a home office but also goes to another office that he visits on a 'habitual' basis (i.e. if the trader rents an office/desk which he visits once a week).
In my opinion, a bookkeeper who expends costs travelling to a client on a regular basis would be allowed the expense because a 'dual', non-business motive for the expense could not be discerned.
