Dr Samadian, a self-employed consultant, has lost his case over expenses incurred for journeys between patients and private clinics and NHS hospitals. Dr Samadian’s appeal lost at the Upper Tribunal over tax deductible expense will have implications for self-employed workers.
In Samadian v Revenue and Customs Commissioners [2014] UKUT 0013 (TCC), the Upper Tribunal upheld the decision made in a First Tier Tribunal ruling that the cost of journeys by a consultant between private clinics and NHS hospitals and between private clinics and his home were not incurred ‘wholly and exclusively’ for the purposes of his private practice, and therefore are not deductible expenses.
Dr Samadian is a self-employed consultant who looks after private patients, as well as working full time as an NHS employee at two hospitals in London. Dr Samadian will hold out-patient appointments at two private hospitals on a weekly basis to assess his private patients, prepare treatment plans for them and carry out other administrative duties at his home office.
The First Tier Tribunal accepted Dr Samadian had a place of business at home necessary for his profession, however due to the fact that his attendance at the two private hospitals was regular and predictable these were also places of business.
Dr Samadian appealed to the Upper Tribunal on several grounds, one of them being he thought the First Tier Tribunal was wrong to characterise the private hospitals as places of business. However, the appeal was dismissed by the Upper Tribunal who found the First Tier Tribunal’s decision to be correct.
The Upper Tribunal provided a summary for treating travel expenses as deductible or non-deductible to support this decision and provide advice going forward;
• Travel expenses are treated as deductible in relation to itinerant work (for example, Dr Samadian’s home visits to patients).
• Travel expenses for journeys between places of business for purely business purposes are treated as deductible.
• Travel expenses for journeys between home and places of businesses are treated as 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.
Dr Samadian’s case highlights the difficulties that self-employed taxpayers face when deciding which travel costs are deductible when calculating their profits. The Office of Tax Simplification’s Review of employee benefits and expenses Interim Report published in August 2013 said it is looking at changes to the travel and subsistence expense rules for employees because of changes to working patterns over the last 15 years, such as the increasing numbers of people working at home and at other places of work.
See our previous article on Dr Samadian’s case
here.