Locum Doctor Loses Tax Appeal After Claiming “Impossible” Travel Expenses

A locum doctor has lost a tax tribunal appeal after HMRC successfully challenged more than £160,000 of travel and subsistence claims that included what the tribunal described as impossible working patterns and excessive mileage.

The case, Mr Nwaneri v HMRC, is another reminder that claiming travel expenses without proper evidence can quickly become very expensive.

What happened?

Mr Nwaneri worked as a full-time locum doctor in the UK from around 2010.

Until 2017-18, his Self Assessment tax returns were handled by an accountant. Following changes to IR35 rules, he began filing his own returns.

Between 2019 and 2022, he worked for several NHS Trusts, including Southport and Ormskirk NHS Trust and Shrewsbury and Telford Hospital NHS Trust through Interact Medical Ltd.

In March 2022, he submitted overdue tax returns and claimed substantial travel and subsistence expenses:

• £54,630 for 2019/20

• £43,480 for 2020/21

• £64,010 for 2021/22

That is a total claim of over £162,000.

In January 2023, HMRC opened enquiries into the returns and asked for supporting evidence, including:

• Contracts

• Mileage logs

• Receipts

• Bank statements

Very little evidence was provided.

Mr Nwaneri told HMRC that records were unavailable because too much time had passed.

That explanation did not help his case.

The red flags

HMRC identified several serious concerns.

Working more than seven days a week?

Some of the expense calculations appeared to assume working patterns that exceeded seven days per week.

That immediately raised concerns over whether the figures were realistic.

Mileage claims did not match vehicle records

HMRC compared the mileage claims to DVLA MOT records for his vehicle.

The mileage claimed was significantly higher than the vehicle’s recorded mileage.

That was a major issue.

Inconsistent records

HMRC also found that figures submitted on the tax returns did not match later spreadsheets provided during the enquiry.

The numbers kept changing.

HMRC disallowed everything

In April 2024, HMRC issued closure notices and disallowed all travel and subsistence claims.

They also charged penalties for deliberate inaccuracies under Schedule 24 Finance Act 2007.

Following an internal review, HMRC upheld its decision.

Mr Nwaneri appealed to the First-tier Tribunal.

The tribunal ruled that the NHS locations were permanent workplaces, not temporary ones.

This was important because ordinary commuting is not tax deductible.

Under employment tax rules, travelling from home to a permanent workplace is treated as normal commuting.

That means no tax relief.

The tribunal also found that subsistence costs were not deductible because they were not incurred wholly, exclusively and necessarily for his employment duties.

And even if they had been allowable in principle, there was still a major problem:

He could not prove the expenses were actually incurred.

There were no sufficient receipts, bank statements or reliable records.

The tribunal found the inaccuracies were deliberate, not careless.

That is a serious finding.

It highlighted:

• Impossible working assumptions

• Inflated mileage claims

• Inconsistent figures

• Lack of credible evidence

The tribunal concluded that inaccurate figures were knowingly submitted with the expectation that HMRC would rely on them.

The appeal was dismissed in full.

Why this matters for business owners and contractors

Too many people assume travel costs are automatically deductible.

They are not.

If you are:

• A contractor

• A locum worker

• A freelancer

• A company owner claiming travel expenses

You need to understand whether the journey is actually allowable.

Regular travel to the same workplace is often classed as ordinary commuting.

That usually means no tax relief.

Keep proper records

This case also highlights a basic but critical issue:

Keep your records.

If you are claiming:

• Mileage

• Hotels

• Train fares

• Meals

• Parking

• Other travel costs

Make sure you keep:

• Receipts

• Mileage logs

• Bank statements

• Contracts

• Diaries or booking records

Without evidence, defending a claim becomes very difficult.

The bigger lesson

HMRC is increasingly challenging aggressive expense claims.

And where figures appear inflated or unsupported, penalties can follow.

This case shows that poor record keeping is one problem.

Claiming figures that simply do not stack up is far worse.

External link: https://caselaw.nationalarchives.gov.uk/ukftt/tc/2026/581?court=ukut%2Ftcc&court=ukftt%2Ftc