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Claiming travel expenses – whether public transport or using your own car (mileage or apportioned costs) – can be confusing.  HMRC have been moving the goal posts of late for the Self Employed – in this context Sole Traders or Partners in a Partnership – rules are different for companies.

If someone has an entirely peripatetic working life and their business is run from home, then there are no restrictions on deducting business journeys and related costs – this could be

  • motoring – on actual costs or mileage
  • public transport
  • accommodation for overnight stays
  • subsistence / meals

By contrast if a self employed person has one or more regular places of work other than home then HMRC deem the travel is “regular and predictable” and it becomes home to work travel and hence not eligible for deduction.

There has been recent case law in this, viz Samadian case – https://www.taxation.co.uk/Articles/2014/02/05/320041/wholly-inarticulate.
The tribunal report can be read as well https://assets.publishing.service.gov.uk/media/5765465ae5274a0da9000064/Dr_Samad_Samadian_v_HMRC.pdf

HMRC run this position unexpectedly and won, and it’s thrown the issue of travel for the Self Employed up in the air, changing what the understanding of the tax rules for travel had been. Many people regard it as a bad ruling, but for now at least, its law.  Briefly:

  • The Samadain case concerned a doctor travelling from an office at home to private hospitals; the private hospitals were considered “places of business”
  • It was also ruled he had a “place of business” at his home
  • It was held that the travel from home to the private hospitals had duality of purpose – thats to say it was home to work travel as well as travel between places of business (as his home was both a home and a place of business)
  • On the principle in Mallalieu v Drummond (a case ostensibly about clothing, but also about disallowing expenses with duality of purpose – those not “wholly and exclusively” for business), these expenses were therefore disallowed
  • “Travel expenses for journeys between home (even where the home is used as place of business) and places of business are treated as non deductible” (quote from tribunal)

The tribunal did re-affirm that expenses are allowable for itinerant working.  They also said “The ‘wholly and exclusively’ test is to be applied pragmatically and with regard to practical reality”.

The law as it stands then, with Samadain being the latest precedent, requires a pragmatic view of reality

  • are journeys “regular and predictable”
  • does the work you carry out at one particular place make it a “place of business”

Broadly the more time you spend at a place, and the less different places you attend, then the more likely that these places are “places of business” and the journeys “regular and predictable”

This does create practical issues as most people’s circumstances will be a blend of the extremes above – some regularity, but also an itinerant aspect.

It an element of judgement as to what expenses are claimable . Some may distinguish their circumstances from Samadain and then claim everything, others be more cautious – both strategies have advantages and disadvantages.

Anyway, your judgement here will determine expenses you can claim.