In Paul Nowak v HMRC [2019] TC7307 an engineer's claim for travel expense was disallowed: he worked on different contracts not a single contract covering multiple different workplaces. A discovery assessment was allowed on the basis that his accountant had acted carelessly.

  • Mr Nowak is an electrical technician, employed to work with electrical motors at various nuclear power stations throughout the country.
  • He was contracted separately to work at a specific power station when his employer, Weir required him.
  • Weir paid a lodging allowance of £30 per day and mileage allowances which were not taxed at source. 
  • He claimed tax relief for travel expenses in excess of the allowance paid, subsistence and accommodation costs.
  • HMRC denied all tax relief for 2012-13, 2013-14, 2014-15 and 2015-16.
  • HMRC contended that his travel expenses were expenses of ordinary commuting: he was working at each site pursuant to separate contracts of employment.
  • Taxpayer appealled. He claimed his contracts amounted to a single employment.
  • He later dropped his claim for subsistence and accommodation costs as he had no evidence of incurring the expenditure.

The FTT found that the taxpayer was engaged on a separate contract for each job. The only evidence to suggest that each site was a temporary workplace is the fact that Weir paid lodging allowances and mileage allowances without deduction of tax: this was not sufficient on its own to satisfy it that the sites were temporary workplaces. 

The FTT was satisfied that the incorrect claim was brought about by carelessness on the part of the appellant’s accountants whom the appellant had told about the arrangements pursuant to which he was employed. HMRC are therefore entitled to make Discovery assessments for the earlier years under s29 TMA 1970.

Useful guides

Employee travel rules
When can you claim travel expenses? What are the different rules for temporary and permanent workplaces?

Subsistence
This is the tax term for food and drink: a claim is possible when you make a qualifying journey

Accommodation: with travel or temprorary workplaces
When and why you can obtain tax relief for staying away from home

Discovery Assessment 
“Discovery” is the power that allows HMRC to reopen closed periods where they believe there is an underpayment of tax, by means of issuing an assessment.

How to appeal an HMRC decision
Step by step guide

External links

Paul Nowak v HMRC [2019] TC7307

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