14 November 2023
Many of the self-pay patients we see are looking to resolve an issue that is causing problems in their lives.
Whether it’s an unsightly skin-tag, a replacement hip, a hernia that is causing discomfort or preventing an active life – often our patients don’t want to wait to have the procedure taken care of by the NHS, particularly now when so much elective surgery has had to be postponed or cancelled.
For some patients the delay is more problematic, they need treatment to allow them to work. Often self-employed and without insurance if they are unable to work they could face real hardship. Typically these patients work in construction, farming, logistics etc. Physical jobs that need a good standard of fitness. Could the costs of their treatment be a legitimate business expense and therefore tax deductible?
The answer (like so many other questions around tax) is, it depends… The relevant area of the Business income Manual (BIM37400) states that; An expense is not disallowed by S341 because the trader (or third party) obtains an incidental or personal benefit provided that it was not part of the purpose in incurring the expense to secure such benefit.The problem you will face is how to distinguish between:
an incidental or unsought benefit, and
the furtherance of some non-trade objective
The possibility that an ‘incidental benefit’ may accrue means you cannot decide ‘wholly and exclusively’ issues by reference only to the effect(s) that follow from the payment. You must establish all of the facts from which you may infer the trader’s purpose (or purposes).
In other words, it all depends on the context and what is being treated. There is a precedent though.
David Parsons was a stunt performer who got injured in the line of work, he paid for private surgery (that he could ultimately have obtained on the NHS) so that he could return to work more quickly – at that time there was a wait of more than a year for the surgery he needed.
The tax tribunal decided in that situation that (whilst there was, incidentally, a private benefit) the expense was incurred for the purposes of the trade (since the private benefit could have been adequately obtained, in time, at no cost).
On the evidence, the Tribunal is satisfied that in terms of his requirements as an ordinary human being, he could have waited, and would have been content to wait, to have the operation on the NHS. The evidence was also that in a physically less demanding job he could have carried on working in the meantime, and that it was only because of the particular demands of the kind of work that he does that he could not carry on working until the operation was done.
The case was brought in 2010 – there is a strong case for arguing that with NHS waiting lists having got much longer, and, if the particular demands of the work a patient does, requires a procedure then it could be an allowable expense.
But if you don’t ask, you don’t get … Watch this space!
