This is day 8 of our Tax & Accounting at Christmas Special, as we analyse the tax and accounting treatments of all things Christmassy and open a door in our Christmas Advent calendar to count down each working day until the Christmas holidays in the UK. 

The Traveller

Christmas generally involves a lot of travelling. Whether visiting friends and relatives or delivering presents.

Santa Claus is likely to self-employed for the purposes of his UK obligations, that is if he is real (shhh!).

We don't really want to delve too deeply into his tax affairs: it's possible that he relies on the operation of the UK/North Pole Double Tax Convention. After all, he only flies in and out of our country for one day a year. It is likely that Santa has a UK base, and he is picking up and delivering parcels from a UK warehouse and delivering them to lots of homes across the UK.

Assuming that Santa is a UK taxpayer...


Santa's bookkeeping has always been done 'In the Cloud', his travel costs are simply coded to one profit and loss account. This can make things difficult when it comes to tax.


  • Travel costs incurred wholly and exclusively for the business will be tax deductible.
  • You can claim tax relief on the running costs of any vehicles that you use in your business. A vehicle can include a sled.

    • If your vehicle is used partly for private purposes you need to make a tax adjustment to disallow a proportion of your running costs that relate to that private use.
    • If you disallow a proportion of running costs, you must adjust your claims for capital allowances too.

Self-employed tax

  • The type of journey that qualifies for tax relief as business travel depends on the way that the self-employed person trades and where his business operates.
  • Unlike the travel rules for employees there are no specific rules for regular and permanent workplaces or depot work for self employed individuals. Unfortunately, this means that if you are self employed cases must be decided on the basis on their own specifics facts and circumstances, this is one area of law where it can be extremely difficult to determine what is allowable for tax.
  • Case law indicates that there is no tax relief for someone whose workplace is based at home for a journey made between home and another workplace if attendance at the second workplace is a regular and predictable occurence. Typically this ruling can affect consultants who have workplaces at home and externally (e.g. in a hospital).
  • In this case Santa's journey from home to his UK warehouse is not going to be allowable for tax, this again follows case law: no tax relief for home to work travel.
  • Will the travel costs of journeys made between the UK warehouse and UK folk's chimney's be allowable? This is a tricky question: one hand it can be argued that an annual journey made on the same night to the same houses is regular and predictable and so would be disallowed, on the other hand, the occupants of those houses may change and Santa may not visit those who don't beleive in him anyway.
  • If a journey is undertaken for mixed reasons (business and private), a proportion of the cost, relating to private activities should be disallowed for tax. If no apportionment is possible the journey is not allowable.
  • There are two ways of claiming motor expenses if you are self-employed:

    • Using actual expenses.
    • Claiming a mileage allowance.
  • See Travel (self employed)


  • You can reclaim all your input VAT on all your motor running costs (except fuel) with no restriction. Food to fuel Santa's reindeer is most likely to be zero rated as animal feed.
  • You have to make an adjustment if you claim fuel and you use your vehicle privately. This means that you need to put through a VAT scale charge adjustment.
  • For other travel costs any VAT is recoverable if the journey is wholly business related.
  • You cannot reclaim input VAT on the purchase cost of a car if it is intended to be used privately, or if it will be available for private use. There is unlikely to be a restriction for sleds as these are treated as commercial vehicles.

For more detail see our subscriber guides:

Travel (self employed)

Motor expenses (self employed)


Record keeping & tax; what, how and how long

Happy Christmas.

Back to our Christmas Advent Calendar