Tribunal case – Motoring expenses
A recent Tribunal decision examined a taxpayer’s appeal against HMRC’s decision to disallow certain motor expenses. The taxpayer carried on his business as a market trader in a number of markets in the North West both as a sole trader and as part of a partnership.
The issue beforethe Tribunal concerned the taxpayer’s activities as a sole trader. The taxpayer stored his trailer, stock and other work items at a yard located four miles from his home. On four non-trading days each week the taxpayer travelled to the yard to clean and carry-out repairs to his equipment. HMRC accept that travel expenditure between the taxpayer’s home and the yard should be allowed on the non-trading days.
However, HMRC maintained that the taxpayer’s place of business was the market and that the travel costs between the taxpayer’s home and place of business were not exclusively for the purpose of his trade. The taxpayer in a concisely written letter set out his contention that the mileage between his home and the yard should be disallowed but that the onward journey from the yard to the market should be allowed. It was noted that if the taxpayer had paid a 3rd party to transport his trailer this would have been an allowable expense.
In giving its decision, the Tribunal considered a number of other cases, and found that the costs of travel between the taxpayer’s home and the market were not exclusively for the purpose of his trade. The Tribunal further found that the yard was not the taxpayer’s base of operation and therefore the costs of travel from the yard to the market were also not allowable.