Business Motoring Expenses

• Tax relief is available on the running costs of a vehicle used by the doctor for private practice purposes.
• Running costs include: petrol & oil, servicing & repairs, road fund licence, insurance, car parking, breakdown service etc.
• The deduction allowable will depend on the private practice mileage travelled compared to the overall annual mileage of the vehicle.
• Self-assessment introduced the necessity to maintain a mileage log. It is not necessary to keep a mileage log for the whole accounting period, but the log should show a true and accurate annual business mileage figure. It is recommended that a business mileage log is maintained every year, as it is very unlikely a doctor’s business mileage will be the same year on year.
• Capital allowances (depreciation) can be claimed on the vehicle(s) used for private practice purposes. The allowance available is 25% of the cost, market value or written down value of the vehicle. The allowance is restricted to reflect the business use only of the vehicle(s) and the maximum allowance for a year is £3,000.
• If a doctor’s private practice income is less than the VAT threshold (£58,000 from 1/4/04) they can claim a deduction for motor expenses based on the Authorised Mileage Rate. Using this method avoids the necessity to retain receipts relating to total vehicle running costs, but not the need to keep a business mileage log.
  

Authorised Mileage Rate 2004/05

• The business miles travelled (mileage log) is multiplied by the appropriate Authorised Mileage Rate to arrive at the deduction for inclusion in the accounts.

• The Authorised Mileage Rate is designed to include depreciation so therefore, an additional claim for capital allowances is not allowed.

Courses/Conferences

• Generally courses/conferences are tax deductible providing they update a doctor’s existing knowledge as opposed to their acquiring new skills. The cost of attending an overseas conference may not be allowable if combined with a holiday as the trip overseas was not ‘wholly & exclusively’ for business purposes. However, the Inland Revenue will normally allow a reasonable proportion that can be shown to be private practice related. Care should also be taken when a doctor is accompanied on an overseas trip by their spouse, as the cost relating to the spouse will not be ‘wholly & exclusively’ for business purposes.

Telephone, Postage & Stationery, Subscriptions, Books & Journals

• Tax relief can be obtained on all the above provided they are ‘wholly & exclusively’ for private practice purposes. It is necessary, however, to maintain a telephone log to ensure business telephone calls only are claimed.
• Professional fees/subscriptions can be claimed against a doctor’s employed earnings or private practice income. Generally, medical indemnity insurance costs are claimed against private practice income.
• The cost of books and journals to maintain a professional library are tax deductible.
  

This information sheet is designed to be a general guide only and no liability is accepted by Taxation Solutions Limited for any loss occasioned in reliance on the information given therein.