By Simon Misiewicz
Article relevant to the tax year 2017/18
Do you work for both the NHS and carry out private work?
Are you unsure what costs are allowed to be offset against your medical income?
It is interesting that doctors and locum’s will offset a number of costs against their medical income. You would think that most costs would be allowable if they are for the purpose of the business. Sadly, it is not always that clear cut.
The Samadian case relates to travel expenses and whether these were incurred ‘wholly and exclusively’ for the purposes of the business. Dr Samadian is employed full-time by the NHS at two hospitals in South London (St Helier and Nelson). In addition, he holds weekly out-patient sessions at two private hospitals (St Anthony’s and Parkside) and has private patients admitted to St Anthony’s.
The Tribunal panel acknowledged Dr Samadian had a dedicated office in his home which was necessary for his professional activity. However, the panel found that there was a dual purpose to Dr Samadian’s travel between his home and the private hospitals and therefore, no deduction could be made for these expenses.
The Tribunal accepted that the following journeys were allowable:
- travel between private hospitals or other private practice destinations (e.g. from a private hospital to a clinic or from a private hospital to see a private patient in their own home or care home)
- emergency call outs starting at the home, but going towards a non-habitual destination, such as a patient in their own home or care home. Emergency call outs to private hospitals or other venues attended in a habitual fashion are not allowable
In another case the FTT, considered case law of Dr Sharat Jain v HMRC TC 04788 2015, determined that the doctor was not an itinerant trader and relying on the 2014 decision in Dr Samadian v HMRC, decided that his visits to the hospitals for the litigation work were regular and predictable and that although home was a work place, the hospitals were also workplaces. Based on Samadian his travel and subsistence expenses were not wholly and exclusively incurred for the purposes of his profession (s34 ITTOIA 2015):
In both cases the travel costs to the hospital were disallowed. You therefore need to be mindful of what costs that you allocate against your medical income or indeed employment income.
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