Claiming self-employed travel when also employed.

Claiming self-employed travel when also employed.

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I am retired and help my daughter and her business partner with their Partnership tax return. She and her business partner are self-employed in a registered Partnership doing singing tuition and the like, sometimes working jointly sometimes individually. Both of them live in the London suburbs and the work is mostly in central London at various venues, much of it in the evenings. There is no 'regular place of work' so no question of 'commuting', so in the normal way of things the home-to-workplace travel is allowable business travel.

In my daughter's case she has no other employment  and there is no difficulty and she can claim all her work-related travel. But her business partner also has an 'employed' job in central London which she commutes to, travelling on from that workplace to do her self-employed work in the evenings.

On days when she travels into central London there is thus a 'duality of purpose' to her trip in and out of town. She would have to make the journey into central London for the evening self-employed work, but she is making it anyway for the non-allowable commute to the 'employed' job.

None of the case law I have found seems to deal with this - all the examples are of a self-employed person who has a regular workplace for his self-employed activities for part of the day, or on some days of the week, and goes on from there to temporary workplaces / clients suppliers, and the case law is clear that the commute is non-allowable, but that the 'onward travel' is allowable.

Here we have someone whose commute is for a different employer, unrelated to the self-employed work. Nevertheless, I assume that the only self-employed travel she can claim is the excess costs of the 'onward journey' from her employed workplace to the evening venues, not the whole cost of travelling in and-out of town?

Thanks for any advice (or even better case law anyone can point me at).

Replies (4)

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By Steve Kesby
17th Jan 2012 12:49

I think you're looking at the wrong individual

You're suggesting that your daughter, having no separate employment that takes her into Central London, has an allowable commute to her regular 'patch'.  Would your view that this commute is allowable be the same if she lived in Manchester and commuted into Central London?  If not, why's it different? If so, how can it be?

Have you considered Powell v Jackman at all?

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By Struggling
17th Jan 2012 19:24

Regular 'patch' issue

Good point, Steve, and it could apply to both individuals. I very much appreciate your responding.

I had looked at Powell v Jackman which was about a milkman who lived away from his 'round', and couldn't claim travel allowance for commuting to his 'patch'. It hadn't occurred to me that central London with multiple (and changing) clients at multiple (and changing) venues constituted a 'patch' when some of the work is also in outer London suburbs (e.g. for lessons in people's homes) and occasional commissions out of London altogether. 

Tricky, isn't it?

Do you also have a view on my original question? 

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By Steve Kesby
17th Jan 2012 15:07

On the original question

I'd agree that you're probably just looking at the original cost.

I can't give you a case, but the arguments are akin to Newsom v Robertson, in that the purpose of the expenditure on the commute is, first and foremost, to get the individual to their "day job" and having attended the "day job" to then get them home again. Neither of those things is a purpose of their business. Even at best there's sufficient duality of purpose in the expenditure to deny relief (each of the purposes doesn't have its own proportion, the whole of the expense can just as easily be wholly atttributed to either purpose).

For your daughter, it's a question of whether there's sufficient suburban engagements to put her more squarely within Horton v Young.

Ther have been some more recent FTT decisions regarding subcontractors, but they're not persuasive precedent and there are some contradictory conclusions that seem to me to just muddy the waters.

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By Struggling
17th Jan 2012 20:44

The '40% for 24 months' rule may apply, I guess?

Very helpful, Steve. That was my view of the 'duality' too. (I think you meant 'additional cost' when you said 'original cost'?)

Coming back to whether or not Central London is a 'usual patch' for my daughter's self-employment, and thus a 'base' she commutes to, I guess we should apply the '40% of time for 24 months rule'? 

Ignoring unpaid 'preparation time' and 'business admin time' (all carried out at home), a quick tot-up of her 'delivery' hours at the places where her paid work has been carried out over the last 2 years indicates it's been 35% in several Central London locations, 18% in her suburban home, 23% in several London suburb locations and 24% in a couple of provincial locations (prolonged assignments requiring temporary accommodation). 

So I was wrong to say her work was 'mostly' in Central London in my original post, and having now looked into where the delivery hours are spent it looks as if  Central London is not yet a  'regular patch' / base - but you were right to alert me to that issue and we shall continue to monitor it.

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