Deducting travel expenses

In the First-tier Tribunal Decision Samad Samadian  (TC02533 – published on 21 February 2013) – the judges considered the deductibility of travel expenses incurred by a self-employed consultant geriatrician.

Dr Samadian has been a medical practitioner since the 1970s. He is employed by the NHS at St Helier and Nelson Hospitals, and is a private consultant at Parkside and St Anthony’s Hospitals. He also has a separate office at home where he:

  • keeps his business and medical records
  • does research
  • considers test results, and
  • prepares treatment plans.

He does not see patients at home, but does travel to various locations to visit patients or their carers.

There is no standard pattern to Dr Samadian’s journeys as he travelled to different locations as required. The tax treatment of some journeys was not disputed between the Dr Samadian and HMRC, the journeys in respect of which they were unable to agree being the following:

  • Travel between NHS and private hospitals, and
  • Travel between home and private hospitals.

The parties referred to a number of cases, which the judges considered in some detail in reaching their decision.

Newsom v Robertson (1952) 33 TC 452

Mr Newsom was a barrister who unsuccessfully claimed a deduction for travelling between his home in Whipsnade and his chambers in London on the basis that he had a well-equipped office at home which he used especially during court vacations. Although different views were expressed in the Court of Appeal, the key points were that although Mr Newsom did a significant amount of work at his home office, this did not alter the fact that it was his home where he had chosen to live with his family. Denning LJ based his judgement on the assumption that every trade has a single “base”, which in this case was his chambers in London.   Romer LJ added that travel between home and work has as its object “not to enable a man to do his work but to live away from it”, and that this does not change if the individual works at home.

Horton v Young (1972) 1 Ch 157

Mr Horton was the leader of a bricklaying team. He operated from home and worked at a number of sites where he kept his team. His trade was described as itinerant, and had no place which could be called a place of business except his home. Travel from his home to the building sites was, therefore, allowable.

Sargent v Barnes (1978) 1 WLR 823

Mr Barnes was a dental surgeon, who had a dental surgery to which he travelled every day. He also maintained a dental laboratory where a dental technician worked, which he visited every day on his way to and from the surgery. The High Court decided that just because the journeys to the laboratory were “necessary” it did not mean the expense was incurred wholly and exclusively for the purposes of the practice. The journeys were in essence journeys between his home and his “base of operations” at his surgery, and he was simply using that journey to visit the laboratory.

Jackman v Powell (2004) EWHC 550 (Ch)

Mr Powell was a milkman who operated a milk round under a franchise agreement with Unigate. It was held that his base of operation was the roads he covered on his round, and although there was no fixed base of operations it could not be said that his home was a place of business.

Mallalieu v Drummond (1983) STC 665

Although this case did not involve travel expenses, it looked at the distinction between object or motive and effect, and made it clear that a court may look behind the conscious motive of a taxpayer where the facts are such that an unconscious object should also be inferred. Lord Brightman explained that “expended for the purposes of the trade” actually meant “expended for the purposes of enabling a person to carry on and earn profits in the trade”. Ms Mallalieu not only wore her dark clothes to appear in court, but also for “the preservation of warmth and decency”.

The Tribunal’s analysis

The basic question then was how the wholly and exclusively test should be applied to the travel expenses incurred by Dr Samadian. The FTT reached their decision by applying the principles in Mallalieu, which – unlike the other cases mentioned above – was not dealing with travel expenditure.  The Mallalieu case highlights the importance of looking at the motive or objective in incurring each item of expense. A pattern of travel whose sole or partial object is to enable the taxpayer to “live away from his work” will fail the wholly and exclusively test.

The FTT placed great importance on the fact that working patterns are not as simple as they were in the 1970s, when it was more reasonable to work on the basis that an individual has a single business base. There is a limited proposition that if an individual only has a business base at home (and no other base) travel from home to various places for business purposes is allowable, following the ratio of the Horton case (see above).

Because – unlike Mr Horton – Dr Samadian regularly attends and uses the facilities at the NHS and private hospitals he falls outside the principle in the Horton decision.

In general, where a taxpayer travels between different business locations, those expenses are deductible.  However, this needs to be looked at in the light of Mallalieu and the Tribunal decided that there was a mixed object in the Dr Samadian’s pattern of travelling between home and the hospitals, with the result that even though they accepted that he had an office at home, the expenses were not deductible.

Looking at the travel between NHS and private hospitals, the key distinction is between travelling in the course of a business and travelling to get to the place where the business is carried on. As a result, this travel is not deductible.


The judges reappraised a number of cases in connection with the allowability of travel expenses. Looking at the specific issues that were disputed between Dr Samadian and HMRC the tribunal found in favour of HMRC. As a result tax relief for travel, particularly travel from a home base, has become much more difficult to claim. We understand that Dr Samadian will be appealing the decision. If you have a client with similar circumstances they should hold off settling their enquiry until Dr Samadian’s appeal is heard.

If you would like further information in relation to the deductibility of travel expenses please contact the TaxDesk on 0845 4900 509 and ask for Paul Howard.