Tax case – Doctor’s travel expenses not allowed by HMRC

Understanding what travel expenses can be claimed when you are self employed can be very difficult, and the case of Dr S Jain vs HMRC is a good example of this.

Dr Jain was employed by the NHS as a consultant orthopaedic surgeon but he also carried out private medical work in two areas – firstly providing medical reports to agencies for litigation purposes and secondly providing private consultations.

With regards to the medical report work, Dr Jain would meet the client for an initial consultation which would be done at one of two different hospitals and he would go to each hospital once a month. One of the hospitals he would visit for one day and the other for two days in total per month. In both cases he would stay at a nearby hotel and afterwards he would then prepare the reports at his home.

Dr Jain claimed travel, subsistence and accommodation costs in relation to the visits to the two hospitals where he met the clients for this report work.

self employed travel expenses hmrc

HMRC argued that he should not be allowed to claim the travel and related expenses for this report work and the case went to the first tier tribunal where the tribunal found that although his home was his place of business for the medical reports work, the two hospitals he visited to meet clients in relation to this work were also places of business – this meant that his travel and related expenses were not tax allowable.

They applied the argument that his attendance of the two locations was regular and predictable – referring to a previous landmark tax case in this respect which was Dr Samadian v HMRC.

A key point to understand with this case is that HMRC disallowed travel between one fixed business base of operation to another.

This goes to show how tricky it can be when it comes to claiming travel expenses when you are self employed.

Our general rule of thumb is that once travel to a location becomes regular you a veering into the territory of it not being allowed, but case law is constantly developing in this area.

Please note this article is about self employed travel expenses, the rules are a bit different for limited companies which we cover in our eBook.

In this particular case there were also issues with the fact that Dr Jain had been accounting using the cash method when he shouldn’t have been, but we have only looked at the travel expenses issue for this article.