I spend most days travelling to clients to chat to them about their accounts. Most (but not all) of my clients are in the south east, and many are within central and south London. Public transport is fine if the client happens to be near a station, but travelling with files, clients papers etc is tricky on the Underground.
Since last Sunday, some roads in London have been designated part of the Olympic Route Network, only to be used by atheletes and officials. The fine for being in the wrong lane is £130, but there is a discount of 50% if paid within 30 days, so £65. What, I thought, would be the situation if tax relief was obtainable - for me visiting my clients, or my clients visiting their patients? A further 40% discount would reduce to cost to £39. Some people might be tempted to pay the money and whizz across London. But not me of course.
So, can tax relief be claimed? The general rule is that expenses have to be wholly and exclusively incurred in the performance of your duty. I think an argument could be constructed to meet this. In 1999, Lord Hoffman in talking about fines and penalties said that: 'Its purpose is to punish the taxpayer and a court may easily conclude that the legislative policy would be diluted if the taxpayer were allowed to share the burden with the rest of the community by a deduction for the purposes of tax.' – so that seems to stop the discussion. But, in an interesting HMRC document BIM 42515, HMRC confirms that: 'Where an employer pays fines that are the liability of an employee, so that the employee is assessable on the payment as employment income, the cost to the employer of paying the fines may be allowable in computing his trading profits'. So, a salaried GP whizzing down the Olympic Route Network on a mission from the practice would get slapped with a £130 fine reduced to £39 as above. The salaried GP would be taxed on the benefit of the £39, so around £16.
Am I tempted? Of course not. I have my own ways of avoiding the traffic. I am off to Borneo in 90 minutes so I will be back on GPOnline.com in three weeks, when the Olympic Route Network will no longer exist!