Self employed – allowable expense?

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 15 posts - 1 through 15 (of 23 total)
  • Author
  • #22290

    Our friend Mr Taxi driver has to pay a tunnel fee travelling to work £2.60 per day. Basically lives one side of the Mersey & works t’other!

    Claims £1000.00 expenses for the above (exactly per year) not a penny over or under! Thats more than 1 journey to work every day of the year!

    Allowable or not?

    All opinions appreciated.

    Julian Hobson

    I wouldn’t allow on the basis that it isn’t an expense wholly and exclusively incurred in that period for the purposes of that employment.

    If you look at reg 28(1)(f)(i) for employed earners travelling expenses incurred between home and the place of employment, paid by the employer, count as income. It also classifies them as an expense NOT wholly, exclusively or necessarily incurred in the performance of the duties of employement.

    In addition I assume you don’t disregard travelling expenses incurred by all those employed merseysiders that live on the wrong side of the river.

    I would have thought that many Self Employed People travel to and from work, the fact that this chap drives his cab which he then uses, to and from work is irrelevant. If he drove his car to a unit on an industrial estate where he then produced widgets, we wouldn’t even think about including the expense of getting to and from the widget factory as allowable.

    hope this helps


    I wouldn’t accept it, on the basis that its not an expense “wholly and exclusively incurred in that period [i:62d2757bb1]for the purposes of that employment[/i:62d2757bb1].” (New Reg 31(3)(a), my emphasis).

    I’d argue that travel costs to and from work are not deductible from non-self-employed working claimants, and as such it can’t be an expense wholly and exclusively incurred in that period for the purposes of that employment for a self employed earner.

    This also means that the amount of petrol that he uses driving to work can’t be taken into account as an expense either 😉

    Hope that’s helpful (and makes sense)


    Thanks, I hadn’t come accross anyone trying to claim expenses ocurred travelling to work before. Though as much, but always better to seek others opinions I find.



    I agree with both Julian & Drem, but was left wondering which side of the Mersey is the “wrong” side?


    What happened to the ferry?


    I don’t agree with any of the previous comments. Firstly, lets quote the right regs! New HB Reg 35 (old HB Reg 28) is about “employed earners”. This is defined in HB Reg 2(1) as having the same meaning as in the SSCBA 1992 – and it says this:

    “(a) “employed earner” means a person who is gainfully employed in Great Britain either under a contract of service, or in an office (including
    elective office) with emoluments chargeable to income tax under
    Schedule E; and

    (b) “self-employed earner” means a person who is gainfully employed in
    Great Britain otherwise than in employed earner’s employment
    (whether or not he is also employed in such employment).”

    So as you can see, people who are self employed are not “employed earners” – they are “self-employed earners”. Therefore – New HB Reg 35 has nothing to do with the self employed – you need New HB Reg 36 for that (and then 38 for the calculation of net profit)

    So what about this cost of travelling through the Mersey? Well, Reg 38(4) says that you should deduct from gross earnings “any expenses wholly incurred in that period for the purposes of employment”. That seems pretty clear to me. If this claimant incurred the £1000 cost of travelling through the Mersey only in the course of his self employment (and yes, that does include driving to his base) then a deduction should be made for it. I also don’t think that £1000 sounds excessive – because I doubt very much that he gets jobs only on one side of the river. So during the day he’s likely to be going back and forth a few times – and paying for it every time. Frankly it sounds like he’s declared too little. I’d say it’s all an allowable expense.


    I suppose I should qoute the right regs myself too! I didn’t mean 38(4) – I meant 38(3) – you should deduct “any expenses wholly and exclusively incurred in that period for the purposes of employment”. But I meant the rest.


    Travelling expenses to and from work have always (custom and practice at least) been excluded but travelling within work has not. You cannnot get tax relief on getting to work as PAYE and I believe it was the clear INTENTION of the legislation governing self-employed for HB purposes to mirror the tax treatment (Mark may wish to argue the regs do not support this).

    So I would agree in part with everyone (hows that for fence sitting on a Friday afternoon?) i.e. travelling through the tunel at the start and end of the day is not eligible but the rest is. For instance, if he starts work at a taxi rank the other side, then that initial cost is a personal cost.


    I really think that the regs are clear on this. The only self-employed expenses that are not allowable are those listed in 38(5), (6) and (7). But travel to and from an office, taxi base, factory or wherever else is not in the list. So it must, by default, be an allowable expense if it is encurred “wholly and exclusively…for the purposes of that employment”. I’m amazed to hear that people think differently.

    Of course, working out whether all or part of an expense would have been encurred regardless of the self employment is not necessarily straightforward. But you still have to do it. You can’t just start making up your own disallowable expenses.

    So what about our friend who pays tolls for the tunnel. Would he EVER have to pay these amounts anyway for something else? If he would ALWAYS have had to pay these amounts even if he wasn’t driving his cab then disallow the lot. If he would NEVER have to pay these amounts unless he was driving the cab then allow the lot. If he would SOMETIMES have to pay the toll regardless of driving his cab then allow some of it but not the rest. I don’t see how any other way of doing it is lawful.


    Just get him to tell you he starts in New Brighton, then goes through the tunnel. 😉
    I thought no-one went “sarf of the river” – sorry, wrong city! 😳 8)

    Although I agree with what Peter says regarding the supposed intention, I think Mark has got it right on this one. It doesn’t say disallow it, therfore its allowed! 😯 8)


    Couldn’t he buy one of these?



    He will have one of them but claiming the full amount 👿 (allegedly) 😈

    Andy Thurman

    As a self-employed person, the taxi driver works from home – not the taxi company base or a randomly designated taxi rank.

    Julian Hobson

    Mark – I think you misunderstood my posting (possibly). I deliberately chose the employed earner regs to demonstrate what the position is for employed earners, because the position is very clear.

    The problem with the self employed regs is that “wholly and exclusively incurred in that period for the purposes of that employment” is not defined.

    I don’t think its too much of a stretch to attribute the very clear position for employed earners as applying in the case of the Self employed given the very similar language.

Viewing 15 posts - 1 through 15 (of 23 total)
  • You must be logged in to reply to this topic.