EMOLUMENTS
– deduction of home to work travel – supply teacher – nature of the job required
an office at home – travel not allowable
THE
SPECIAL COMMISSIONERS
MARY
JANE WARNER - Appellant
- and -
R J PRIOR (HM INSPECTOR OF TAXES) -
Respondent
Special
Commissioner: DR JOHN F AVERY JONES CBE
Sitting
in public in London on 20 January 2003
Howard
Dereham, Solicitor, for the Appellant
Raymond
Hill instructed by the Solicitor of Inland Revenue for the Respondent
©
CROWN COPYRIGHT 2003
DECISION
- This
an appeal by Mrs Mary Jane Warner against an adjustment to a self-assessment for
1999/2000 in which she claims a deduction in computing her emoluments for expenses
of travel from her home to the schools where she works as a supply teacher. The
Appellant was represented by Mr Howard Dereham and the Inspector by Mr Raymond
Hill.
- There
was an agreed statement of fact as follows:
- The
Appellant lives in Faversham, Kent and is employed as a supply teacher by Kent
County Council
- In
the year ended 5 April 2000 she travelled 2494 miles in her own car travelling
between her home and the various schools at which she taught.
- Her
travel expenses, computed in accordance with Inland Revenue authorised mileage
rates, total £1,122. This amount is not disputed.
- Approved
supply teachers appear on a list maintained by Kent County Council. Schools in
need of a supply teacher have access to the list and approach the Appellant directly.
- The
Appellant does not have a long-term employment contract with Kent County Council
but is employed on an "as and when needed" basis. When a school approaches
the Appellant she will always know from the outset how long and where she will
be teaching.
- She
is paid by Kent County Council for the time she spends teaching but does not receive
any travel expenses either from Kent County Council or from the school.
- Contracts
to teach at particular schools may last for a few days or up to a whole term.
- Under
the regulations determining a schoolteacher's pay and conditions a teacher is
required to perform two types of duty. There is directed time, which covers actual
teaching time and there is additional time that will include, for example, marking
work, the writing of reports and the preparation of lessons.
- The
Appellant carries out the bulk of her additional time in an office she maintains
at home.
- I
also heard evidence from the Appellant and make the following further findings
of fact. As a supply teacher, she has to step in to the shoes of a teacher who
is unable to teach on a particular day or part of a day. Sometimes she is engaged
the evening before she is required to teach. She teaches early years and may also
teach Key Stages 1 and 2. She has a study in her home where she has all the material
needed to prepare lessons, including a computer with the facility to contact the
sources she requires including the QCA website. Unlike a permanent teacher she
cannot plan ahead, she may have to teach pupils of different ages and needs to
step into another teacher’s shoes at short notice in the middle of a particular
subject. When at school she has no classroom of her own in which she could work
if she was not teaching at a particular time and at the schools she normally visits,
there are no spare classrooms and other rooms can be taken up with other activities
such as special needs lessons. After school hours rooms can be used by other teachers
for meetings with parents. The school is locked about one and quarter hours after
teaching ends. She prefers to finish work, such as marking, at the school but
this is not always possible and she takes work home and brings it back in the
morning even if she is not teaching there next day. She has no computer access
at school as she does not have a password or the ability to obtain one. She sometimes
manages to mark papers during the lunch break in the staff room but otherwise
it is difficult to find a place to work. In particular, she has nowhere to leave
papers even if she returns to teach the following day. A letter from Kent County
Council obtained by the Inland Revenue Solicitor’s Office stated that the head
teachers at the schools where the Appellant normally teaches had informed them
that the same facilities are provided for supply teachers as for permanent teachers.
I prefer the Appellant’s evidence on this point that she has in practice fewer
facilities through not having any place of her own to work or keep papers. There
is no contractual requirement about where she performs "additional time"
(see paragraph 2(8)) duties. All these factors mean that as a practical matter
she needs a place of work somewhere other than at the school, which in fact she
has at her home.
The
law
- From
1998/99 section 198 of the Taxes Act 1988 reads:
"(1)
If the holder of an office or employment is obliged to incur and defray out of
the emoluments of the office or employment—
- qualifying
travelling expenses,…
there
may be deducted from the emoluments to be assessed the amount so expended and
defrayed.
(1A)
‘Qualifying travelling expenses’ means—
(a)
amounts necessarily expended on travelling in the performance of the duties of
the office or employment….
- The
test for the deduction of travelling expenses has accordingly changed from being
one of "wholly, exclusively and necessarily" to one of "necessarily".
It was not suggested that the earlier cases did not remain relevant to the new
test since the difficult part of the test to satisfy is "necessarily".
Contentions
of the parties
- Mr
Dereham for the Appellant contends that the Appellant has two places of work at
her home and at whichever school she is sent to, that the place of work at home
is objectively necessary to the performance of her duties, and accordingly that
the expenses of travel between them is allowable.
- Mr
Hill for the Inspector contends that the Appellant has only one place of work
at the school where she is at any time teaching, in which case any travel is from
home to work and is not allowable; or that even if she has two places of work,
at home and at the school, this fact alone is insufficient to establish entitlement
to deductibility of the expenses of travel between them. The expenses of travel
between two different places of work are allowable only when the duties are required
to be performed in two specific locations.
Reasons
for the decision
- I
have found that the Appellant has a place of work outside the school and that
it is objectively necessary having regard to her duties for her to have a place
of work somewhere else, which is in fact at her home. Does this mean that she
is entitled to deduct travelling expenses between the two places of work? One
starts with the principle that travel between home and work is not deductible,
as is illustrated by the well-known case of Ricketts v Colquoun 10 TC 118.
Owen v Pook 45 TC 571 establishes an exception to the rule and so
it is necessary to examine the principle that this case establishes. The facts
were that Dr Owen, a medical practitioner in Fishguard where he also resided,
was appointed to a part-time appointment at a hospital in Haverfordwest 15 miles
away. He was on stand-by duty on certain nights and weekends when he was required
to be accessible to the hospital by telephone. He claimed a deduction from his
emoluments from the hospital for the cost of travelling between Fishguard and
the hospital. Lord Pearce, one of the majority, approved the finding of the Commissioners
that the travel expenses were incurred in the performance of his duties:
"It
was as a doctor practising in Fishguard that the Appellant was appointed to his
stand-by duties. He was to stand by in Fishguard. In Fishguard on the telephone
he undertook his responsibilities to the patient and the hospital." (page
591F)
Lord
Wilberforce said:
"Unless
a suitable retired doctor could be appointed (and that case might be different)
the Committee would have to appoint a doctor with a practice of his own and also
with suitable obstetric and anaesthetic experience; he might live and practise
within 15 miles or one mile or 100 yards of the hospital: the choice in the matter,
if any exists, does not lie with the doctor, who is there in his practice, but
with the Committee, which decides, however near or far he works, to appoint him
and to require him to discharge a part of his duty at his practice premises."
(page 596H)
Lord
Guest said:
"In
the present case there is a finding of fact that Dr Owen’s duties commenced at
the moment he was first contacted by the hospital authorities. This is further
emphasised by the finding that his responsibility for a patient began as soon
as he received a telephone call and that he sometimes advised treatment by telephone.
It is noteworthy that under clause 19(b)(3)(iv) of his terms and conditions of
service the hospital is referred to "where his principal duties lie".
There were thus two places where his duty is performed, the hospital and his telephone
in his consulting room." (page 590D)
The
minority, Lord Donovan and Lord Pearson, decided that on the facts that the doctor
had only one place of employment.
- Lord
Wilberforce was the only member of the House of Lords who sat both in that case
and in Taylor v Provan 49 TC 579. In that case he described the decision
of the majority in Owen v Pook:
"The
basis of the decision of the majority in that case (the minority holding the opposite)
was that the nature of the office, or employment, of part-time anaesthetist and
obstetrician required the doctor to work partly at his surgery and partly at the
hospital." (page 612H)
- Taylor
v Provan is an unusual case in that only the particular taxpayer could do
the work. As Lord Reid states: "It was impossible for the companies which
contracted with him to get the work done by anyone else. That I regard as the
essential feature" (page 606A). Lord Morris said: "The office or employment
was very special. There was probably no one else who could have filled it. It
was an office created to be held by one particular person, i.e., a person living
in Canada who had unique and unrivalled experience and knowledge in regard to
arranging mergers of brewery companies" (page 609D). Lord Salmon said: "The
English companies required Mr Taylor’s services and no one else’s" (page
623H). It followed that any travel from where he was based in Canada or the Bahamas
was objectively necessary to performance of the duties. He would not have given
up his work in these places any more than Dr Owen would have given up his practice
in Fishguard.
- The
issue is accordingly whether the majority in Owen v Pook decided that having
two places of employment meant that travel between them was allowable or whether
there were other factors that made it allowable in the particular circumstances
of these cases. Lord Reid in Taylor v Provan said that two places of work
were not sufficient on their own:
"The
question whether he had two places of work was the main question at issue. But
I do not see how consistently with the main ratio in Ricketts’ case that
could in itself be sufficient to justify the decision…. I think that the distinguishing
fact in Owen’s case was that there was a part-time employment and that
it was impossible for the employer to fill the post otherwise than by appointing
a man with commitments which he would not give up. It was therefore necessary
that whoever was appointed should incur travelling expenses." (page 605D,
F)
- I
agree with Mr Hill that the principle established by the majority in Owen v
Pook is that the doctor was appointed because he worked in Fishguard which
at 15 miles was a reasonable distance to enable him to perform his emergency duties,
he would stand by so that he could be contacted at Fishguard, and if necessary
he would start his work in Fishguard by giving instructions on the telephone.
If one considers what would have happened if he had moved to another practice
it is obvious that the hospital appointment would not necessarily continue. He
might be too far away. His place of work in Fishguard, where, in the days before
mobile phones, he could be contacted, and nowhere else, was essential to his appointment.
- This
reading of the principle in Owen v Pook is consistent with the understanding
in later cases. In Miners v Atkinson 68 TC 629 the Special Commissioners
had found that "It was not necessary for the work which Mr and Mrs Miners
carried out at 4 Sandringham Road to be done at that precise address. It could
have been done anywhere" (page 634G). That passage was approved by Arden
J at page 644D. In Kirkwood v Evans [2002] STC 231 Patten J at page 243b
said that the taxpayer, a homeworker who visited his employer’s premises in Leeds
one day a week, was not unique and the location of his home from which he worked
every other weekday was historical and was unconnected with any term of his employment:
"The necessity of travelling to Leeds is dictated by his choice of the place
where he lives and not by the nature and the terms of the job itself."
- In
the present case, I have found that the nature of the Appellant’s job in practice
requires that she does some work otherwise than at school. But the location of
that other place of work at her home has no bearing on her appointment to her
job or her ability to perform it. If she moved, at least within the Kent area,
there is no evidence to suggest that Kent County Council would have any objection.
The result would be that she might have further to travel to some schools and
less far to travel to others. It would make no difference to her ability to do
the job. The significant factor is that her secondary place of work at home is
dictated by where she lives and not by the requirements of the job itself. In
contrast, Dr Owen was appointed because he worked in a particular place, Fishguard,
where he could be contacted by the hospital in emergencies and from which he could
reach the hospital in a reasonable time. The location of his secondary place of
work was dictated by the hospital job. I do not consider that the Appellant has
brought herself within the exception to the rule that travel from home to work
is not allowable.
- Accordingly
I dismiss the appeal in principle.
J
F AVERY JONES
SPECIAL
COMMISSIONER
SC3040/02
Authorities
referred to in skeletons or argument and not referred to in the decision:
Arthur
B Knap v Morton, Special Commissioners 24 November 1998
Brown
v Bullock 40 TC 1
Kerr
v Brown, Special Commissioners 23 September 2002
