Travel costs – deductible or not?

The Samadian case outlines the key considerations when considering what relief is available for travel and when travel to work is not travel to work.

The Dr Samadian case, related to the tax deductibility of travelling expenses, went to the Upper Tribunal.

Dr Samadian was working as a self-employed consultant as well as an employee of the NHS. He had claimed the costs of travelling between private clinics and NHS hospitals and between private clinics and his home.

Costs not allowable

The Upper Tribunal held that these journeys were not incurred ‘wholly and exclusively’ for the purposes of his self-employment and therefore the costs are not allowable. 

The Tribunal noted that Dr Samadian works full time in the NHS at two London hospitals but also has a private practice as a self-employed medical practitioner. He has a home office and also consulting rooms he hires at two private hospitals. In addition, he occasionally conducts home visits.

Dr Samadian argued that he should be able to reclaim travel expenses for journeys between NHS and private hospitals, and between his home and private hospitals, as they are, in his view, incurred wholly and exclusively for the purposes of his private practice. 

The Upper Tribunal dismissed the appeal and found the First Tier Tribunal decision to be essentially correct. It ruled that the home office can be recognised as a place of business and a use-of-home claim allowed, but the travel from that place of business in the home will not necessarily be allowable, unless it is in pursuit of an ‘itinerant’ business journey. 

The Upper Tribunal found that Dr Samadian's home office was necessary to perform his work but that the pattern of ‘regular and predictable attendance’ at other locations meant that they were places of business. 

Tribunal guidance

The Tribunal provided guidance to support its decision and to provide advice going forward, which takes the form of four main points:

  • Travel expenses for journeys between places of business for purely business purposes are treated as deductible.

  • Travel expenses for journeys between a location that is not a place of business and a location that is a place of business are not deductible.

  • Travel expenses for journeys between home (even where the home is used as a place of business) and places of business are treated as non-deductible (other than in very exceptional circumstances, such as if Dr Samadian were at one of the private hospitals preparing to see a patient, realised that he had left their notes in his office at home and made a special trip home but immediately returned to the hospital).

  • Travel expenses are treated as deductible in relation to itinerant work (such as Dr Samadian's home visits to patients). 

The key issue seems to be whether a journey is habitual or itinerant, and this judgment will need to be made on a journey-by-journey basis. This means that practitioners will need to impress on their clients that it is vital to keep robust records of all business journeys undertaken. 

Download the full case.