The Medical Profession… Self-Employed Travel

Over the last few years, HMRC have raised many investigations relating to the tax affairs of medical practitioners, and in particular, their self-employed travel.

For example, a self-employed geriatrician who is based at home, but regularly travels on specific days each week to set hospitals, would not get his travel from “home to hospital” allowed as a deductible expense for taxation purposes.

HMRC are quite strict in this area, and have frequently been investigating self-employed doctors and others in this connection. They go back up to 6 years and can revise and increase the taxable profits owing to the now disallowed self-employed travel.

HMRC quote one very well-known case, which they won, namely Samadian v HMRC (Upper Tier Tribunal Decision) in 2014.

We look at the facts of the Samadian case below.

Samadian V HMRC (Upper Tier Tribunal Decision) (2014) [BTC 504]

Dr Samadian was a geriatrician. He worked full time for the NHS. In addition, he held set weekly out-patient clinics at a private hospital, namely ‘Parkside’, every Wednesday afternoon.

He hired out-patient consulting rooms at Parkside hospital, for a three hour duration, for scheduled sessions. His nameplate was temporarily placed on the door during these sessions. If the patients were subsequently admitted to hospital, they remained under the care of Dr Samadian.

He also worked privately at another hospital, St. Anthony’s. However, this work was intermittent, i.e. no set pattern, and he worked there as and when needed.

Occasionally, Dr Samadian saw the patients at their homes or other care locations such as a nursing home.

HMRC reviewed his self-employed travel and came to the following conclusions:

His travel expenses between his home and the private Parkside hospital were not allowable.

His travel expenses for journeys between the NHS hospitals and the Parkside private hospital were not allowable.

His travel expenses for journeys between the NHS hospitals and a patient’s home or nursing home were allowable.

His travel expenses for journeys from his home to see a private patient at their home or other care location, (such as a nursing home) were allowable.

His travel expenses to St. Anthony’s Hospital were allowable.

Dr Samadian had a ‘pattern of regular and predictable attendance, in order to perform his professional functions as a geriatrician at the Parkside private hospital.

With regard to his travel from home to the Parkside private hospital and back, the tribunal came to the decision that there must have been a ‘mixed object’, regarding his travel, with at least part of his motive being to live away from the Parkside hospital.

Accordingly, HMRC disallowed his costs of the journeys between Dr Samadian’s home and theParkside private hospital, and also the costs of the journeys between the NHS hospitals and the Parkside private hospital.

The Tribunal decided that Dr Samadian needed ‘a home in which to live and carry on his own private life’, and it was an inevitable feature of his journey home in the evening from the Parkside private hospital that part of his purpose was to get home in order to advance his private non business interests.

With regard to the outward journey from his home to the Parkside private hospital, this was made to enable him to maintain his home where he chose and away from the places where he carries on his business in a predictable and fixed way.

Summary of Dr Samadian’s journeys, and their allowability as a trading deduction.

Illustration of a questionnaire for medical clients, re self-employed travel…..

RBP, Chartered Accountants take on a new surgeon client.

They give him a questionnaire, including some of the following questions:

• Do you work from home?
• Do you have an office at your home?
• What business duties do you carry out at home?
• What records do you keep there?
• Do you prepare any medical reports at home?
• What research do you do there?
• Have HMRC previously accepted that you work from home, and that your home is your business base? (re new client)
• Have you previously made a ‘use of home as office’ claim, which has been accepted by HMRC? (re new client)
• Can we please have details of the hospitals that you regularly work at?
• How regularly, and on what basis?
• Do you pay for any consulting rooms at the above hospitals?
• If you regularly work at certain main hospitals, what percentage of your total travel for the year, relates to travelling to and from your home to them, compared to the remainder of your travel?
• Has the pattern of your travel to the above hospitals been the same for previous years, and is likely to remain the same in the future?
• Have HMRC ever previously raised an enquiry re your self-employed travel (for a new client)?
• The above questionnaire only represents an example of the types of questions that an accountant should ask his self-employed medical clients, regarding their travel.
• It is not exhaustive, and each case is different, and turns on its own separate facts.