Q: As you know I have a number of properties that are undergoing development. Am I allowed to claim for travelling expenses in relation to my visit to the various properties?

A: The first point to make is that if you travel “wholly and exclusively” for the purpose of your property development business, you can deduct the cost of the travel. More about this particular issue later.

The real issue is to establish where you run your business from. If your home is the office for your business then travel from your home to the development sites or even to go and see your accountant or the bank manager would be an allowable expense. Do bear in mind that this only applies if you are actually using your home as your office. If you have another office somewhere else then the travel from home to that office is definitely not an allowable expense. However, travel from that office to the sites is unlikely to be challenged.

I would also point out that if you are using an agent to manage your investment properties then HMRC could argue that your letting agent’s office is the office from which the business is run and not your home.

I referred above to what is commonly called the duality of purpose test. Basically, it means that if there was a private element involved in the travel then HMRC can justifiably argue that part of the travel was not for business and disallow the whole or part of the expenditure.

It is therefore very important to keep proper records of when you traveled, over what distance and for what purpose.

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