This is an interesting ruling, that all should be aware of - especially those that opt to move closer to better paying work.
Contractor’s home to hotel travel disallowed | AccountingWEB
A Scottish contractor, who lodged in Swindon to be available for work in the south of England, had his travel and accommodation expenses disallowed as not wholly and exclusively incurred for his business.
Taylor claimed the expenses between his home in Melrose, Scotland and a hotel in Swindon in his 2016/17 tax return.
HMRC opened an enquiry into Taylor’s 2016/17 return in April 2018 and requested a breakdown of Taylor’s expenses claims. In November 2018, HMRC issued a closure notice and a penalty notice for £1,015.96 and £1,115.35 respectively. This was later reduced to nil.
The closure notice disallowed much of the taxpayer’s expenses claims on the basis that they were not incurred wholly and exclusively for the purposes of his trade. The penalty was assessed based on careless behaviour.
The FTT agreed with HMRC’s interpretation: the main reasons Taylor chose to stay in Swindon were to improve his chances of obtaining better rates of remuneration and to reduce the journey time from his home in Melrose to his place(s) of work.
As the FTT put it, it was not as if Taylor was unable to live and work in Melrose. His situation was little different from a taxpayer choosing to stay in a hotel closer to their workplace during the week so that they could spend longer at home, eg to help with childcare or to catch a later train, and then claiming those hotel expenses against their income.
Full details on Bailii.org ref TC07893 (link to the PDF in the article)
Contractor’s home to hotel travel disallowed | AccountingWEB
A Scottish contractor, who lodged in Swindon to be available for work in the south of England, had his travel and accommodation expenses disallowed as not wholly and exclusively incurred for his business.
Taylor claimed the expenses between his home in Melrose, Scotland and a hotel in Swindon in his 2016/17 tax return.
HMRC opened an enquiry into Taylor’s 2016/17 return in April 2018 and requested a breakdown of Taylor’s expenses claims. In November 2018, HMRC issued a closure notice and a penalty notice for £1,015.96 and £1,115.35 respectively. This was later reduced to nil.
The closure notice disallowed much of the taxpayer’s expenses claims on the basis that they were not incurred wholly and exclusively for the purposes of his trade. The penalty was assessed based on careless behaviour.
The FTT agreed with HMRC’s interpretation: the main reasons Taylor chose to stay in Swindon were to improve his chances of obtaining better rates of remuneration and to reduce the journey time from his home in Melrose to his place(s) of work.
As the FTT put it, it was not as if Taylor was unable to live and work in Melrose. His situation was little different from a taxpayer choosing to stay in a hotel closer to their workplace during the week so that they could spend longer at home, eg to help with childcare or to catch a later train, and then claiming those hotel expenses against their income.
Full details on Bailii.org ref TC07893 (link to the PDF in the article)
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