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Bad news on business mileage

In recent tribunal decision Dr Samadian has claimed business mileage for journeys to and from his home office and a private hospital as wholly and exclusively allowable expenditure.

It is accepted that Dr Samadian had a dedicated home office, but the tribunal did not accept that this office was the starting point for calculating business mileage.

Dr Samadian worked fulltime in the NHS at certain hospitals but also had a private practice.  He had a home office arrangement and hired consulting rooms at two private hospitals and occasionally conducted home visits.

The tribunal found that the home office was necessary to perform Dr Samadian’s work, but because there was a pattern of “regular and predictable attendance” at other locations – the private hospitals, for instance – they too were places of business.

Broadly, it held that while the home office can be recognised as a place of business (and a use of home claim allowed) the travel from that place of business will not necessarily be allowable, unless it is in pursuit of an ‘itinerant’ business journey.

In an attempt to clarify the position, it said:

  • Travel expenses for journeys between places of business for purely business purposes are deductible.
  • Travel expenses for journeys home (even where the home is used as place of business) and places of business are non-deductible.
  • Travel expenses for journeys between a location which is not a place of business and a location which is a place of business are not deductible.

This could mean that many self-employed workers will need to keep detailed mileage logs to justify any claim.

 

 

Date: 12th February, 2014
Author: Cathy Corns

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