Jess is a sessional GP on a budget, saving for her wedding so she’s recording every single penny she spends – let’s look at what she can get tax relief for (and why or why not).
6 am – Jess’s brand new mobile phone alarm wakes her up.
Claim tax relief on the estimated business proportion of the cost of the mobile phone.
She gets dressed in her work clothes.
Cannot claim for normal clothes.If protective clothing were required (white coats) that would be claimable.
She picks up her dry-cleaning to drop off later.
Cannot claim for normal dry cleaning.
Grabs some fruit and a cereal bar and her water bottle for breakfast.
Cannot claim for normal meals.
7.30am – gets into her car and checks the postcode of the locum practice she’s working at today, puts it into her satnav and sets off.
Can claim for the satnav – if it is predominantly for business – or a business proportion if there is shared usage.
Realises she’s short on petrol, and stops off to fill up, picks up a sandwich for lunch at the same time.
There are two ways to claim relief for motor expenses: a % of business usage, or 45p per business mile. Sandwich is not deductible.
8 am - arrives at new practice and goes in to start work.
This is a genuine locum post – business is run from home, so home to here (and back) is a business journey.
Uses her iPad to issue invoice to practice from LocumDeck for the work done at the end of the session.
The cost of the tablet (and accessories) can be claimed (a business proportion if there is shared usage).
Lunch time spent driving to next practice, no spare parking spaces so has to pay to park.
Travel to the next practice and the parking cost will be allowable
Deal with messages on her phone and new locum bookings before she starts her afternoon session.
The call/data charges on the phone are claimable – a reasonable % split between business and personal.
Drives home dropping off dry-cleaning on the way.
Dropping off the dry cleaning is an incidental part of the journey, so the journey is still allowable.
This is a day at her salaried practice so she doesn’t need to worry about working out where to go, paying for parking or invoicing. So nice and simple from an expenses point of view (shame the job isn’t so simple!).
No relief due on travel to the salaried job and back. If she’d done any visits then she could claim 45p/mile for these.
Lunch time CPD session – no food provided, and she can’t eat last night’s strong smelling curry that she brought in to heat up for lunch forgetting she had a training session, so she has to buy a sandwich and a Mars bar.
Here the lunch cost would be an incidental part of the training, and outside the normal pattern, so should be allowable.
Spends a few hours in the evening researching some clinical matters using her new superfast broadband connection (while her fiancé relaxes watching Netflix).
Can claim a reasonable proportion of the internet connection. Can claim either a flat rate amount for use of home based on hours worked – or a more complicated calculation of the actual business element of the total home running costs.
Today is her regular locum slot at a practice 20 miles away. They are short of doctors so she always works there on a Wednesday. Decides to do a big supermarket shop on the way home, and while she’s there buys some new printer cartridges.
Journey to a regular place of work is not deductible. The purchase of printer cartridges, assuming used for work, is allowable, but the mileage won’t be as it is just an incidental part of a non-allowable journey.
Gets home, checks her bank for payments due from practices.
Can claim relief for bank charges for the business account.
Does her pensions paperwork for the last month’s locum work on LocumDeck and issues a ‘Send reminder’ to a practice who hasn’t paid her yet.
Can claim for pension contributions.
Pays her accountant for last year’s tax return and checks that her payment for her GMC subscription has gone through ok.
Can claim for accountancy fees for accounts and tax return. Can claim for all relevant professional subscriptions, including NASGP membership, and technical reading.
Checks LocumDeck for what work is coming up and to see if any new bookings have been made.
Can claim for the subscription to her locum booking service and invoicing system.
Pays some household bills.
Record the hours spent to maximise the claim for household expenses (see above).
Notes that car needs servicing and that must mean road tax and MOT is due too.
If claiming mileage at 45p per mile, then no extra claim for repairs, road tax, MOT, insurance etc – but if claiming on the basis of a proportion of total costs, then these costs are all proportionately tax deductible.
Wonders whether it is time to consider buying a new car – she dreams about a brand new electric car, but the reality is she can only sensibly afford a second hand basic Fiesta.
The cost of a new car is only fully deductible (the business proportion thereof) if it is a brand new very low emissions car.
Capital allowances on other cars are given at 18% or 8% - depending on emissions level – and then only on the business percentage – and then only if claiming on a proportion of total costs basis, not a big enough figure to influence what she wants to buy.
Morning at her salaried job and a half day off planned – but receives a call on her mobile from her salaried practice as she drives in asking if she can do an afternoon session today as one of the partners are off sick. She expects to be paid her locum rate for this.
Journey to work not allowable. Fee should be paid as overtime through the payroll not as self employed locum work (but still at locum rate if that is what was agreed).
Meets up with some fellow locums in the evening for a pizza, and discusses some tricky patients.
Is the pizza an incidental cost of a technical meeting (allowable) or is it a meet up of friends where they talk shop (not allowable)?
Another locum day – to a local practice she has occasionally worked for before. First patient, a baby, throws up all over her new dry-clean only top – note to self, only buy washable things for work.
Travel here is allowable. Dry-cleaning of items soiled in the course of work is allowable.
Wipes and similar, not provided by the practice, would be tax deductible
Training session in the evening – costs £50, but it includes an evening meal.
As the meal is an incidental cost of the training session cost, the whole is allowable.
Liz Densley is medical specialist partner with Sussex Chartered Accountants, Honey Barrett, and is secretary of AISMA (the Association of Independent Specialist Medical Accountants). Contact her at email@example.com.