BIM37935 - Wholly & exclusively: expenditure having an intrinsic duality of purpose: travel between home and work
You should disallow a trader’s cost in travelling from
home to work except in the case of an ‘itinerant’
trader.
The facts in Newsom v Robertson [1952] 33TC452 are set out in
BIM37605.
Romer LJ succinctly explained why the costs of home to work
travel in that case were not allowed, 33TC middle of page 465:
In other words, the object of the journeys, both morning and evening, is not to enable a man to do his work but to live away from it.
There is an inevitable and unavoidable private purpose in
journeys between the place of work and the place of abode. In
Newsom v Robertson Denning L J drew a distinction between living
expenses and business expenses. Denning L J explained that a
finding that the taxpayer carried out professional work both in
their office and at their home did not change the essential private
nature of the journey between the two. Notwithstanding that the
barrister in Newsom undertook significant work at home, that was no
more the base of his operations than was the train that took him
between home and chambers.
A stop over on the journey between work and home does not
convert the essentially private journey into a business journey; at
best it makes the journey dual purpose and therefore falls foul of
ICTA88/S74 (1)(a) - see Sargent v Barnes [1978] 52TC335
BIM37630.
For those who do not have ready access to tax case volumes,
the part of Denning L J’s judgement where he explains why the
expenditure was not allowable is set out below, 33TC middle page
464:
A distinction must be drawn between living
expenses and business expenses. In order to decide into which
category to put the cost of travelling, you must look to see what
is the base from which the trade, profession, or occupation is
carried on. In the case of a tradesman, the base of his trading
operation is his shop. In the case of a barrister, it is his
chambers. Once he gets to his chambers, the cost of travelling to
the various courts is incurred wholly and exclusively for the
purposes of his profession. But it is different with the cost of
travelling from his home to his chambers and back. That is incurred
because he lives at a distance from his base. It is incurred for
the purposes of his living there and not for the purposes of his
profession, or at any rate not wholly or exclusively; and this is
so, whether he has a choice in the matter or not. It is a living
expense as distinct from a business expense.
On this reasoning I have no doubt that the
Commissioners were right in regard to Mr. Newsom’s travelling
expenses during term time. The only ground on which Mr. Millard
Tucker [taxpayer’s counsel]
challenged their finding during term time was
because Mr. Newsom has a study at his home at Whipsnade completely
equipped with law books and does a lot of work there. The
Commissioners did not regard this as sufficient to make his home
during term time a base from which he carried on his profession,
and I agree with them. His base was his chambers in Lincoln’s
Inn. His home was no more a base of operations than was the train
by which he travelled to and fro. He worked at home just as he
might work in the train, but it was not his base.
