AUF WIEDERSEHEN, PET! actor Tim Healy faces the prospect of a hefty tax bill after the first-tier tax tribunal for the second time heard a case relating to expenses claimed during his stint in West End musical Billy Elliot between December 2004 and December 2005.
Healy, who lives in Cheshire, had initially claimed a partial victory after his claim for £32,503 in accommodation expenses was found to be “wholly and exclusively for the purposes of his profession”, and therefore tax deductible. 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 upper-tier tribunal “set aside” the decision and “remitted” the case back to the first-tier tribunal to be heard afresh.
In this latest hearing, Healy chose not to contest the original findings on his subsistence and taxi fares, but his claim for accommodation fees was struck out as he had chosen to stay in a three bedroom flat so as to have guests.
Nichola Ross Martin, the founder of Ross Martin Tax Consultancy, who advised Healy on the case, said: “Despite what HMRC tried to argue, the message that came down from the earlier upper tribunal hearing and is backed up by this deicision is pretty clear when it comes to accommodation costs.
“These costs may well be allowable, but they will be decided on a case-by-case basis, according to their facts. The law sets no limit as to how long one can be away from home to obtain tax relief. It may be one night, or as in this case even nine months. Healy’s admission that when choosing his accommodation, the consideration of chosing accommodation with the intention of having his guests to stay was the single factor that sealed his fate.
“Hindsight is a wonderful thing: if he had chosen a flat with a single bedroom, the question of guests would not have arisen. Had he also retained receipts for his expenditure on subsistence, things might have gone in his favour.”
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