Travel Allowable or not

Travel Allowable or not

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A self employed butcher travels 3 days a week to the butchers to do work. Is the mileage allowable. He has only become self employed for this job. He is looking for either more part time work or a full time job/self employment so the travel should hopefully be short term.

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By Steve Kesby
11th Jun 2012 12:19

I'm curious...

... how much butchery a self-employed butcher can actually do at home?

I think that any travel that he engages in in order to put himself in the position of being a self-employed butcher isn't for the purposes of the business, but for the proprietor's personal (financially motivated) purpose of being able to carry on that business.

It's rather like a milkman can't be a milkman (irrespective of the ancillary work - bookkeeping etc - that he carries out at home) until he gets to where his milk round is (see Powell v Jackman in BIM37635).

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By bduncan
11th Jun 2012 13:42

Most trades people can do little from home

Does the same not apply to a painter and decorator, On call GP etc? I would always claim mileage for them.

The butcher currently only has one contract but that is not through choice.

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By Steve Kesby
11th Jun 2012 14:02

Are you saying...

... that he's engaged by a butcher's shop on a self-employed basis? I'm struggling with that a bit, but it's the proprietor of the butcher's shop's problem.

It doesn't change my answer though; all the time there are specific places of work (rather than a patch), he does seem to fall more within Powell v Jackman than Horton v Young (see BIM37620) which applies to the other people you mention (go to site, move on to a completely different site a short time later).

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By Steve Holloway
11th Jun 2012 14:13

Missing the point ...

The key is determining where the trade is actually carried out. A butchers trade is carried out where the dead animals are and any argument to the contrary is not going to succeed. Travel form your home to the place of your trade is not allowable as it is seen as intrinsically private in that you have decided not to live where you carry out your trade.

Re your painters & decorators, builders and other travelling trades ...well actually these people have no other choice but to have a base other than where they practice their trade as it would clearly be impossible to set up office at their clients houses or sites. Horton v Young is the defining case where the following was established:

Brightman J first of all elaborated on the variety of possible places of business that a Schedule D taxpayer may have. The judge considered that there was a fundamental difference between a self-employed person who travels from his home to his shop or his office or his chambers or his consulting rooms in order to earn profits in the exercise of his trade or profession and a self- employed person who travels from his home to a number of different locations for the purely temporary purpose at each such place of there completing a job of work, at the conclusion of which he attends at a different location. The judge went on to say that he did not think it mattered if the taxpayer in the latter category conducted any trade or professional activities at their home. The essential point was that the nature of their trade or profession was itinerant.

I think the main problem that you have with your butcher is that it is difficult to see how such a person working 3 days a week at the same premises could be self-employed. I wonder if his employer has correctly applied status tests?

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Replying to justsotax:
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By Towards excellence
11th Jun 2012 15:58

While we're on this subject, my client - who is a director of a company through which he runs his franchise - insists that suppliers, salesmen etc are telling him that as his home address is the registered address, their accountant says (!) that he can claim home to work travel. Could the expert posters above confirm that this is wrong?

(Sorry to jump in on someone else's post.)

Thank you.

SA

 

 

 

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Replying to jon_griffey:
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By [email protected]
13th Jun 2012 13:06

Yes, if the registered address same as trading address,

but I believe in your client's --No.

what happen if your client use your office address as his company registered address?

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By justsotax
11th Jun 2012 16:26

Whilst i agree with the general comments from

the Steves....I would also note that these cases stated have specifically been selected by HMRC (who with the best will in the world are not going to pick cases that don't favour their 'interpretation' of the tax law'). 

 

 

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By Steve Kesby
11th Jun 2012 16:50

@justsotax

I disagree with your point in this instance. Yes, HMRC are prone to favour cases that favour their interpretation, but these are simply the leading cases, and Horton v Young is actually rather useful to their opposition.

There's been a raft of (mainly contractor) cases that have been through the tribunal in the last few years, which have examined the margins between Powell v Jackman at one end of the scale and Horton v Young at the other, sometimes with some surprising results, but generally going in the contractor's favour.

The butcher though is clearly even more at the Powell v Jackman end of the scale than the market trader in the FTT case of Manders.

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By Steve Holloway
11th Jun 2012 16:50

@ towards excellence

Possible they are talking about the temporary place of work provisions which apply to employees? Your client, as a director and employee, would naturally have his place of business as his home address and he could claim for travel from this address to another provided it is temporary. Temporary means that he does not expect it remain as a place of work for more than 24 months.

@ just so tax ... I agree entirely with your underlying point concerning not relying on HMRC guidance as being necessarily authoritative. Do you disagree, however, with the advice we have given on the question posed. It struck me as pretty non-negotiable given the precedent advice given in Horton. If you have an angle then I would be happy to listen.

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By justsotax
11th Jun 2012 17:02

@steves....I do agree

with your conclusions.....but I am always up for looking for the 'angle' that may justify challenging the revenue's interpretation.  Of course more info is always requried to find out about the individuals circumstances...what he actually does at home (soures the meat? stores it? makes the delivery from home, but then prepares on site etc),  not sure really don't really know much about the butchery profession.....that said neither i suspect would the inspector looking at this....so i guess that would be my starting point....find out about the profession and this guys particular slant on things.  9/10 times it will probably be clear cut, cannot get relief....but there is always that other case that has circumstances that do not quite fit neatly into the revenues 'preferrred case law'.

(perhaps i just like arguing with the revenue over anything but if it is sufficiently in doubt then loading the revenue with paper until it comes out of their ears can have the effect of moving the case to a compromise at worst sometimes)

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Replying to ireallyshouldknowthisbut:
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By Towards excellence
11th Jun 2012 17:11

Steve Holloway, thank you very much - no it is not temporary, it is his shop, which he intends to run for a very long time.

Thanks again.

SA

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By Steve Holloway
13th Jun 2012 08:25

Funnily enough ...

was at the PTP course yesterday and the case involving the guy you used to be in Aufwiedesehen Pet came up. He won is case to claim £37k of flat rental costs while he was engaged in a year long production of Billy Elliott in the West End. Conventional logic suggests that his place of trade had to be the theatre and therefore travel costs (or hotel costs in lieu) would not be allowable but the court found in his favour as he was on a rolling 2 week rolling contract. So if he could be judged to be itinerant at one location then I wonder about other trades where there is one base but no security of contract (which tends to be the case with the genuinely self-employed)?

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By David Gordon FCCA
13th Jun 2012 15:37

locum

 I have a couple of locum opthalmologists as clients.

Your butcher is in a similar trading style.

If he is a skilled qualified butcher let him use a "Locum" style contract.

Presumably he has tools of trade, coats,  boots, etc to keep and maintain, 

 

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