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Travelling expenses, sole trader

Travelling expenses, sole trader

My client is a self-employed electrician. He travelled from home to 10 various assignments in 4 years, but one job lasted 14 months. HMRC has agreed that he is an itinerant worker, but has disallowed his travelling costs for 2014 on the grounds that he performed one job only in that tax year, quoting Horton v Young & BIM 37675.

I've studied the judgement in Horton v Young & nowhere does the judge refer to a time limit on a particular job. HMRC appear to have made the assumption in BIM 37675 that there must be at least 2 jobs in a year, but this leads to the bizarre situation of my client travelling to the job in question on April 5 2013 & his costs are allowable, but from 6 April 2013 to 5 April 2014 they are not allowable. This flies in the face of natural justice & any thoughts welcome please.


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04th Mar 2016 10:41

I agree with you. HMRC will not agree with you, and the tribunals are increasingly being swayed towards HMRC's thinking when it comes to travel expense cases. How much are the travel expenses for 2013/14?

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By JimFerd
04th Mar 2016 11:57

A quote from the case:

"The test cannot be whether the job keeps the taxpayer at a particular location for perhaps two hours, as in the case of the chimney sweep, or three weeks, as in the case of Mr. Horton"

14 months is perhaps a tad different to [Edit: 3 weeks], but the principle is the same.

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04th Mar 2016 11:53

No justice for the little man

Indeed Jim -  the galling thing is that I opted for the "independent" review by an inspector not involved in the case, who was even more draconian in her judgement & imposed penalties. I've explored the further options of Tribunal & ADR, but both will not consider cases where the law is in dispute & will involve costs & time my client simply cannot afford.

So the little man is hammered by an increasingly hostile HMRC while multinationals laugh all the way to the bank.

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