In the recent case of Dr Samadian, HMRC have won in asserting that some travel from the home office to hospitals for private work was personal rather than allowable as a business expense. This main points considered were:
- Travel to the hospitals was habitual, it appears there were a couple of regular hospitals where private consultations were held
- The travel had a mixed motive as the return journey was back to home and therefore had a dual purpose, and would not be allowable as it was not wholly and exclusively for the purpose of the business
This was despite:
- The rooms where the consultations were held contained nothing of use to the doctor except a desk and chair, he did not even have access to the computer
- The room was not dedicated, only being used for the duration of the appointments, then being used by others
It is very likely that this decision will be disputed as it could have major implications for many homeworkers, the key issues considered by HMRC in this case were:
- Habitual travel: it appears this should not apply to workers visiting many different sites with no regular pattern
- A mixed objective in returning to the office as it was also the home. This could be of major concern to all homeworkers, as it would seem all journeys could be covered
In an era when so many people are working from a home office, while there seems to be some justification in a challenge to habitual travel, the nature of the office or facility being used should surely be considered, and mixed objective seems far removed from the reality for homeworkers. Let us hope this ruling is challenged and at least partly overthrown.
This article is only a brief overview of the facts in February 2013 which may well change. For a more detailed report refer to Taxation magazine. If you have any specific queries relevant to your personal circumstances you should seek professional advice before taking any further steps. If you would like advice in this or other areas feel free to call. Alastair Wood, AW Accounting, Gravesend – Accountants who “speak your language”