In what could become a landmark decision in the interpretation of “wholly and exclusively” allowable expenditure, Dr Samadian has finally lost his protracted battle with HMRC over his business mileage claims.
This case had been on-going for over 7 years, including 3 Tribunal Hearings, and could have significant impact across all professional self employed activities where the business owners work from home but also has another business base at which they deliver their expertise on a regular basis.
Keeping the right records
Although not essential for claiming making the business mileage claims, a good way to protect yourself is to keep a business mileage log to support your claim. In the absence of a mileage log, Dr Samadian was asked to supply a schedule of his typical weekly journeys to support the 65% business claim. The schedules submitted contained two “regular” journeys which were disputed by HMRC;
• Mileage between NHS hospitals and private hospitals.
• Mileage from home to the private hospitals.
The journeys between NHS hospitals and private hospitals were regarded as non-deductible on the grounds that the object of the travel was to put Dr Samadian into a position where he could carry on his business away from his employment, therefore the travel was not integral to the business itself.
HMRC presented their long-held view that cost of travelling between home and the work place is generally not allowable on the grounds of not being incurred “wholly and exclusively” for the business.
What will HMRC generally accept?
Each case should always be judged on its own facts, but HMRC will generally accept the following journeys as allowable:
• Journeys between private hospitals/practices to see a patient in their own home or care.
• Emergency call outs starting at the home, but going towards a non-habitual destination, such as a patient’s own home or care.
• Travel to attend training courses, where there is no duality of purpose.
• Trips to visit private secretaries, accountants, solicitors, insurers or other professionals.
• Travel associated with the collection of evidence/information re medico-legal reports or expert witness court appearances.
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