Doctors travel expenses – Tax cases

Deciding if an expense is an allowable deduction for tax purposes dependents on tax legislation and how this legislation is interpreted by the Courts.

In January 2014 the decision in a case regarding a doctor’s travel expenses was released.

It has been a long established rule that any journeys from a person’s home to a permanent place of work are not allowable expenses for tax purposes. Many medical professionals, and among them Dr Samadian however, have more complex travel arrangements.

The First–Tier Tribunal findings In Dr Samad Samadian v HMRC were:

• The doctor worked at four different hospitals under NHS and private contracts and also had an office at home.

• Home was his invoicing address, where he kept his medical instruments and where the majority of his administration took place.

• Home qualified as a place of business.

• He carried out a significant amount of professional and administrative work at home and it was essential for the doctor to maintain an office outside the hospitals where he ran his private clinics.

• Attendance at specific private hospitals was regular and predictable and involved significant performance of his clinical work.

• The doctor was not “itinerant” (although he occasionally made house visits to patients) and the case could be distinguished from Horton v Young as, whereas in Horton, the bricklayer’s home was found to be the taxpayers “locus in quo”, “his base” and his “only place of business” the building sites on which he worked were not fixed or regular places of trade.

• Dr Samadian had three different places of business, his home and two hospitals. His attendance at each hospital was regular and predictable even though his use of each as a work place was only temporary and transient (he shared his room with other consultants).

The FTT concluded that all home to/from NHS Hospitals, home to/from private hospitals and travel between NHS and private hospitals was not allowable for tax purposes.

They did agree that any travel from home to patients’ home or other care locations was allowable for tax purposes.

Deciding whether travel expenses are allowable is a complex area. Locums for example, often travel from home to various practices. Deciding what expense can be claimed requires good record keeping and careful review of the journeys carried out. Where there is regularity and a pattern to the journeys, the travel expenses are unlikely to deductible even if home is classed as a work base/office. Tax relief should not be overlooked though as it is likely that some journeys will qualify.