Home-to-work travel - when is the cost deductible?

As a rule, the cost of travelling to and from your home to a place of work isn’t tax deductible. But where do you stand if your home is also your workplace? 


The Upper Tribunal decision in Samadian v HMRC (on appeal from the First-tier Tribunal) is an important benchmark in respect of travel expenses between home and a place of work. 

Case recap

Samadian (S) is an employed NHS doctor who also does private (self-employed) work. He has a home office, which both tribunals accepted was a base of operations for his self-employed business. He has two other bases located in private hospitals. The disputed tax deductions related to the cost of travel to and from three bases of operation.

The ruling

Ordinarily, the cost of travel between various workplaces, in the course of employed or self-employed work, is tax deductible. Indeed, the tribunal allowed S’s claim for travel between his bases located in the private hospitals. However, it refused a deduction where the travel started and ended at S’s home. It considered that those journeys fell foul of a fundamental tax rule. 

Wholly and exclusively

The Upper Tribunal’s reasoning for refusing a deduction was that while S’s house was a base of operations for his business, it was also his family home and so any journey between the other bases and it had two purposes: personal and business. The rules say that an expense that isn’t “wholly and exclusively” for business isn’t a tax deductible.

Note. The tribunal allowed deductions for travel between S’s and a patient’s home, because unlike trips between his bases of operation, there was no frequent or regular pattern to these. The tribunal thought this important, and it’s this part of the judgment that might cause trouble. 

Trap. While the judgment relates to expenses for a self-employed business, the wholly and exclusively rule also applies to an employed worker’s travel. HMRC might eventually cotton on to this and start to challenge claims for travel by employees to customers they visit frequently or regularly. For now we think you’re safe, but it’s a different story for anyone self-employed who has a base of operation at home. 

HMRC Challenge

HMRC attacks claims for expenses by those with regular patterns of travel. For example, a freelance bookkeeper whose office is at home, but who travels to the same clients frequently to carry out work might now be refused a tax deduction.

Tip. If you’re self-employed and make regular trips to the same places to carry out your work, try to combine those journeys with an irregular business element. For example, make a diversion to pick up office supplies or deliver a business letter. This would make the whole journey tax deductible.
Take care to review your travel expense arrangements to ensure you are protected in case HMRC question the expenses you have put through. 


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