04.02.13 Samadian v HMRC

15th February 2013

The decision of the First Tier Tribunal in the case of Dr. Samadian v HMRC, which was issued on 28th January 2013, may have far reaching implications for the self-employed who are based at home but claim travel costs in respect of journeys to ‘habitual’ workplaces.

Details of the Case
Dr. Samadian’s travel expenses have been the subject of a HMRC enquiry which has lasted over seven years and has already been the subject of three tribunal hearings.  The point at issue is whether Dr Samadian can claim expenses in respect of journeys from his home office to locations which he regularly attends in the course of his business duties.  Dr. Samadian claimed for two regular journeys;

• Travel between NHS hospitals and private hospitals; and
• Mileage from home to the private hospitals

The decision of the tribunal centred upon the definition of “wholly and exclusively”.  Dr. Samadian works in both an employed capacity for the NHS and privately.  He has a permanent NHS office and also uses an office at home for his private work although he does not see any patients there.

The tribunal held that both the journeys from home to the private hospitals and the journeys between hospitals were not allowable because the travel was not an integral part of the business itself. 

Travel between NHS Hospitals and Private Hospitals
Whilst on NHS business Dr. Samadian was an employee and so, was travelling from home to his place of work.  It was held that the onward travel from his place of employment to the private hospital was not allowable as the purpose of the travel was to put him into a position where he could carry on his business but, until he had arrived was not an integral part of the business. 

Mileage from Home to Private Hospitals
Although the tribunal accepted that Dr. Samadian does maintain a place of business at home it considered that there was a “mixed object” in the travel between home and the private hospitals because he would always need to maintain a separate home.  The fact that this doubled as his business premises did not discount the fact that the travel was actually from home to a regular workplace.

Implications
The outcome of the case could affect many professionals who maintain a home office but claim expenses to regular and repetitive locations in the course of their business operation.

Dr. Samadian has 56 days to appeal if he wishes to do so.  If he does not, HMRC will need to decide whether they will attempt retrospective action on similar cases that they are understood to have stockpiled awaiting this decision.

We await publication of the ruling.