Judges reject home office tax claim

A new ruling by judges could change how landlords claim mileage expenses when travelling between their home and rental properties.

The first-tier tribunal found that a doctor’s business mileage claims to and from his home office and a private hospital where he worked were not ‘wholly and exclusively’ business expenses, but were commuting.

The case, relating to geriatrician Dr Samadian, has roots in a 2006 HM Revenue and Customs inquiry into the doctor’s claims.

He submitted a weekly journey schedule of trips between NHS and private hospitals where he held sessions and his home office to support a 65% business mileage and capital allowance claim for his car on his self-assessment return.

HMRC rejected the claim as a legitimate business expense and proposed an alternative 6% business proportion, but the two sides could not reach an agreement.

The issue has spanned three separate tribunal hearings and the latest, at the end of January, found in favour of HMRC. The tax body argued that because the purpose of the journey undid the non-business journey home it could not be treated as wholly and exclusively for business. Tribunal judges supported this. Dr Samadian is expected to appeal the decision.

The protracted battle could now impact other self-employed people. Because the panel did not agree that the home office could be classed as the starting point for calculating business mileage involving habitual journeys there are potentially wide implications for those with home offices.

Landlords, who operate from their own home but have to visit their rental properties for work could be affected. Those with rental properties some distance from their homes or abroad may no longer claim business mileage for trips to visit the properties.

In effect, if there is a mixed motive in the journey because it involves a return to the place where the person lives, travel expenses could be denied.

The panel said that there was a “mixed object” in Dr Samadian’s travel between home and the private hospitals as part of the object was to maintain a home in a location separate from them. The journeys between NHS and private hospitals were also said to be non-deductible because “the object of the travel is to put the appellant into a position where he can carry on his business away from his place of employment; the travel is not an integral part of the business itself”.


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