Commuting expenses are not deductible?

John_Pierpoint

business costs against your self employed income when calculating your self employed profit to enter on your probably 3 figure self assessment tax return.

[if you start making serious self employed profits you will he heading first for 9% class 4 NI and then getting involved in VAT, as well as income tax you already understand.]

jimmo

The employed and the self employed are subject to different rules for travelling expenses.

You have correctly identified that normal commuting is not claimable by the employed but, in the context of tax for the employed, normal commuting actually means more than just journeys between your home and your permanent workplace.

http://www.hmrc.gov.uk/manuals/eimanual/EIM32055.htm


In that context your journey between B and C (your normal employment workplace and a place where you exercise your self-employment) is normal commuting and you cannot claim the expense against your employment.

For the self-employed commuting (travel between your home and your place of business) is not claimable but for very many self-employed people their home is their place of business so, when they travel from their home on business, they are not commuting. They are undertaking business journeys (travel between different places where their self-employment is exercised) which are claimable.

http://www.hmrc.gov.uk/manuals/bimmanual/BIM37605.htm


When you travel from your normal place of employment to a place where you exercise your self-employment that is not a journey between different places where your self-employment is exercised so it is not a business journey. It is something else and is not claimable.

For your journey C to A (travel between your client’s premises and your home) the question is again whether that is a journey between places where you exercise your self-employment or commuting?

As regards registering your self-employment, as a rule of thumb, you start trading when you first acquire a paying customer. If you have a contract in place with your customer you have probably started trading and should register but if you haven‘t, and your “customer” is nothing more than a potential customer, you haven’t yet started trading and don’t need to register yet However the claimable expenses you have incurred will be pre-trading expenses claimable as if you incurred them on the day you actually start trading.

http://www.hmrc.gov.uk/manuals/bimmanual/BIM46351.htm

andreauk2009

jimmo wrote: »

For the self-employed commuting (travel between your home and your place of business) is not claimable but for very many self-employed people their home is their place of business so, when they travel from their home on business, they are not commuting. They are undertaking business journeys (travel between different places where their self-employment is exercised) which are claimable.

Hi Jimmo
thanks for the answer. Would this situation change how the cost are calculated if a yearly ticket is in place?
The yearly ticket is used for daily commuting, but also for business. It wouldn't make sense buy two tickets for the sake of claiming it, would it?

jimmo

On the one hand you already have your yearly ticket for use in commuting to your employment so your self-employment business journeys could be seen as costing you nothing.

On the other hand, you could argue that whilst you have spent £x on your yearly ticket, you actually use it for 11 journeys each week. 9 of those journeys are commuting journeys between your home and your place of employment, 1, the journey between your place of employment and a place where you practise your self-employment is “normal commuting” or a non-business journey and the other, between your (self-employed) customer and your normal place of business, is a business journey.

Therefore, if you visit your customer every week, 1/11th of your yearly ticket cost represents business expenditure.

Can I remind you that the employed and the self-employed are subject to different rules and to illustrate that point if you had visited your customer as part of your employment you would be able to claim nothing. See example 1 here.

http://www.hmrc.gov.uk/manuals/eimanual/EIM31833.htm


As your visits to your customer are within your self-employment apportionment of your yearly ticket cost seems to be perfectly acceptable.

http://www.hmrc.gov.uk/manuals/bimmanual/BIM37600.htm


In principle, I would say that you probably have a perfectly valid claim but I can’t help the feeling that in practice it will be more trouble than its worth.