AUF WIEDERSEHEN, PET! actor Tim Healy claimed a partial victory in a landmark tax tribunal against HM Revenue & Customs after it was found his claim for £32,503 in accommodation expenses where “wholly and exclusively for the purposes of his profession”, and therefore tax deductible.
Healy, who is based in Cheshire, had appeared in the West End musical Billy Elliot for a total of nine months following three months of rehearsals between December 2004 and December 2005.
He was successful in his claim for living accommodation expenses as it was recognised the sole purpose of the rental of the property was to facilitate his work.
He failed, though, to prove expenses on subsistence at £4,094 and taxi fares at £4,080 fell within that remit, and so lost on those claims.
The case is pivotal as there is very little case law on actors working away from home.
Nichola Ross Martin, who acted for Mr Healy in the case, said it was fascinating that the issue had not been dealt with before.
“What’s bizarre is that we have a lot of case law on site-based workers like construction workers and doctors, but we don’t on others”, she said.
“One of the reasons [that this issue had not been addressed before] may be that it costs so much to appeal to the Revenue, and normally expenses aren’t very high, so the combination of that means that most people feel it isn’t worth their while appealing.”
Mr Healy could have been successful in his claim for travel expenses, had he more thoroughly itemised his taxi usage.
Judge Barbara King was unconvinced that all his taxi trips had been for the purpose of his work, and could well have also been for socialising as his bank statements showed he had been visiting the Groucho Club in central London.
“If he [Healy] had had itemised journeys, then he could probably had justified the travel”, said Ms Ross Martin.
She went on to call for clearer guidance from HMRC on who may qualify for subsistence expenses as itinerant workers.
“If this case had happened a year later he actually could have got tax reliefs since because the law has changed, but not for the year he was under assessment.
“We have tax relief on subsistence, but no-one knows who an itinerant worker is apart from traditional ones like fruit-pickers, but what about all these other people?”
The law now states that if you are an “itinerant worker”, then tax relief is available on subsistence. It is generally accepted that workers such as cockle and strawberry pickers fall into that group given that they move from place to place regularly.
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile
I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward