This has become an extremely complex area in recent years and a recent tax case, concerning a consultant, which restricted mileage claims, will have repercussions for sessional GPs.
First of all – what journeys are allowable for GP travel expenses?
Salaried GPs may claim for journeys undertaken wholly in the performance of their duties. Where the practice reimburses a doctor for visits (pretty rare!), then reimbursements up to 45p per mile (assuming less than 10k miles per annum) are tax free. Payments in excess of that (sometimes seen in payments by hospital trusts) will be treated as taxable benefits and should be shown on form P11d at the end of the year, and must be recorded on the employment pages of the tax return.
If the practice reimburses less than 45p per mile, the difference can be claimed as an expense of employment. If there is no reimbursement at all, the then full 45p per mile can be claimed as an expense of employment. Where miles exceed 10k p.a. then the reimbursement rate drops to 25p.
The above rates relate to car travel; motorcycles can be reimbursed/claimed at 24p; cycles at 20p.
Allowable journeys for salaried GPs would include patient visits, meetings (necessary ones as part of the employment), and travel between different sites, but see the caveat below. Home to work journeys are not allowable.[Tweet "Salaried GPs can't make travel claims for home to work journeys"]
Additional mileage may be claimed in restricted circumstances such as:
- Dr D is employed by multi-site Practice A to work at Surgery X. If Dr D is asked to work at Surgery Y for a limited time (perhaps to cover a maternity leave), then temporary travel from home to another place of work for an intended period of less than 2 years will be treated as allowable.
Note on the other hand that if Dr E was employed on a temporary basis for the maternity leave mentioned above, home to work mileage would not be allowed because Surgery Y would be his main (and indeed only) workplace.
Travel between sites cannot be claimed in the following circumstance:
- Dr D is still employed by Practice A at surgery X. He lives close to Surgery Y and pops in each day on his way to work to pick up post. This does not make the journey between the two surgeries a business journey.
- Dr D is still employed by Practice A. He works Mondays and Tuesday at surgery X and Wednesday and Thursday at surgery Y. These are two separate places of employment and travel between them or from home to work for either of them is not deductible.
For locums, claims will depend on the pattern of their work. If they are ‘itinerant workers’ – so that they work at different places from day to day with no discernible pattern, then it should be possible to argue that the main place of work is home – the base from which the business is run. This should make all journeys to surgeries allowable.
If however there is a pattern, claims will be restricted. For example:
- Dr L is a freelance locum. He has a number of regular jobs. He covers at Surgery A on Mondays, does 2 days a week at Surgery B and the 4th and 5th days are totally variable. It is likely that Surgery A and Surgery B become ‘workplaces’ so that home to each of those premises will be a personal journey. The 4th and 5th days should fall within the itinerant rules so that home to surgery will be deductible.
Sometimes the pattern will not be obvious in advance. A short spell of locum work may develop into something more regular (at this stage there is a risk that the locum is no longer freelance in respect of that placement and may need to become salaried, but that is beyond the scope of this article).
What records do you need to keep?
Recently we have seen examples of HMRC asking to see mileage logs and refusing claims without them. So please try to keep a mileage log of all practice related journeys. It is much easier to take out what turns out not to be deductible, than to try to recreate information that wasn’t retained in the first place.
A mileage log can be a notebook kept in the car; a spreadsheet or a phone app that calculates journeys that you can annotate.
What if you have not kept a log?
For home to freelance surgeries, it is easy enough to ‘Google’ journeys to find the mileage. Visits are much harder if you haven’t retained records. Some surgeries’ computer systems can produce a printout of visits by the GP, from which you can then work out the mileage. This might work for salaried GPs, but the practices are likely to be less enthusiastic hunting out the information for irregular locums.
Don’t forget to include other travel in the course of work – such as for training courses. If they are not local, that can be a noticeable amount. Salaried doctors will not be able to claim it themselves; they will need to try to get reimbursement from the practice.
If the pattern of work has not changed then a sample period might be sufficient but this is only likely to work for salaried GPs’ visits – and if HMRC want to do it by the book, it still may not be enough. Locum work is unlikely to ever be settled enough for a sample period of mileage log to be representative – so GPs in this position need to get into the habit of keeping a regular log.
Self-employed GPs may usually claim a mileage rate similar to salaried GPs, but if their turnover exceeds £81k (for 2014-15) they should claim a proportion of total car running costs.