Teresa and I delivered a seminar for a group of clients and prospective clients last week, on the subject of bookkeeping and tax for small business owners. One topic that was hotly debated during the Q&A session was whether a sole trader who works at home can claim the cost of journeys to client sites.
Sole traders aren't restricted to "the work you do at home must be part of your substantive duties" like company directors, explained Teresa, but she then spoke about the Dr Samadian case and how the journeys must not be "regular and predictable".
"What is 'regular and predictable'?" asked one woman.
"You might get different answers to that question if you ask different tax inspectors on different days," admitted Teresa.
That brought on a flood of specific scenario questions.
"I visit the same customer once a week, if I go on different days will that still count as regular and predictable?" asked a young woman.
"I go to different parts of the same city and pay the same bus fare, but I'm not always going to see the same clients. Is that regular and predictable?" said a guy.
"How long do I have to be working with a customer for it to count as predictable that I'm going to see them?"
"What if I'm travelling several days each week to the same town to visit prospects as well as new clients?"
"How will the taxman actually know when I go to visit my clients?"
At least Teresa could answer that one with a reasonable degree of certainty by pointing out that invoices can be checked for time and days worked, just as train and bus tickets, and petrol receipts, can give clues of dates travelled.
But afterwards, over a long glass of red wine in the pub, she sighed exhaustedly.
"Why are there no clear guidelines on the subject of what 'regular and predictable' actually mean on a day-to-day basis for our customers?" I asked her curiously.
"Search me, Allie," she groaned. "It would make my life so much easier if I could just say 'yes that's OK', 'no, you can't claim that'" when I review their expense receipts. But because there's no clear definition of 'regular and predictable' in this sense, and because it's so subjective, it's really difficult to know what they can and can't claim. And as for food and drink for sole traders - let's just say I'm so glad we didn't get on to discussing when that can be claimed, because there are so many questions around whether a business is 'by nature itinerant' that it makes my head spin!"
Bookkeeping and accounts preparation suddenly didn't feel quite so difficult after all.
"I thought there was an Office for Tax Simplification?" I asked. "Can't they investigate things like this?"
"Oh they can," sighed Teresa, "but, Allie, the government's not obliged to actually make any of the changes that the Office for Tax Simplification recommends. They set up the Office, they made it permanent, but they don't have to listen to it."
"Then is it actually worthwhile having one?"
"Don't ask me!"
We head home deciding that we will never understand the workings of the British political system.