By
Tom Bickle
I’m on holiday with the family, can I claim it as a business expense?
Every year, we hear variations of the same question:
“I’m going on holiday with my family, but I’ll be doing a bit of work whilst I’m there. Can I claim some of the holiday as a business expense?”
It’s an understandable question, particularly for creatives such as videographers, photographers, content creators and social media influencers whose work can take them almost anywhere.
Unfortunately, the answer is rarely as straightforward as people hope.
The “Wholly and Exclusively” Rule
For self-employed individuals (including those trading in a partnership), business expenses must satisfy one fundamental test: they must be incurred WHOLLY AND EXCLUSIVELY for the purposes of the trade.
This rule is contained in Section 34 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005).
In simple terms, the question isn’t whether you carried out some work while you were away. Instead, it’s why you incurred the expense in the first place.
A real-life example
Imagine you’re a professional videographer and you book a family holiday for yourself, your spouse and your children.
While you’re there, you take your recording equipment and drone, capturing stunning photographs and aerial footage that you later sell through stock image websites or to commercial clients.
At first glance, it feels reasonable to claim part of the holiday against your business because after all, the photographs generated income for your business.
However, this is where many people fall into the trap.
The difference between business activity and business purpose
HMRC distinguishes between two important concepts:
Apportionment
Some expenses can be divided between business and private use where there are clearly identifiable business elements.
Examples include:
- Business mileage in a privately owned vehicle.
- Working from home.
- Mobile phone usage.
- Mixed-use premises.
These costs can often be fairly apportioned.
Dual Purpose
The problem arises where the expense itself has both a private and a business purpose.
If you would have incurred the expense anyway for personal reasons, simply carrying out some work during the trip doesn’t necessarily make the expenditure tax deductible.
This is known as having a dual purpose, and it is often where claims fail. Think of a barrister buying a pair of trousers, they could wear those anywhere so fail the duality of purpose test… but, wearing a gown, wig or frock coats worn by King’s Counsel, this isn’t the type of thing you’d wear to pick up the kids so that’s considered allowable.
What would HMRC ask?
Imagine an HMRC officer asked one simple question:
“Would you have gone on this trip if you weren’t planning to do any work?”
If the honest answer is “Yes,” then it becomes difficult to argue that the holiday itself was incurred wholly and exclusively for the business.
The fact that you made commercial use of your time while away does not automatically convert a family holiday into a business trip.
What do the courts say
This principle isn’t just HMRC’s opinion.
In the case of Bowden v Russell & Russell, a solicitor travelled overseas to attend conferences while also intending to enjoy a holiday with his wife.
The court found that the travel had both business and private purposes from the outset.
As a result, the travel costs were not deductible because they failed the wholly and exclusively test.
While every case depends on its own facts, the principles established by the courts continue to influence HMRC’s approach today.
So can anything be claimed?
Possibly.
While the main holiday costs are likely to be challenged, separately identifiable business expenses may still qualify if they were incurred solely for the trade.
For example:
- Additional baggage charges for your professional equipment.
- Drone permits or commercial flying permissions.
- Photography licences or location access fees.
- Transport undertaken solely to reach a photography location.
- Additional hotel nights required exclusively for a commercial shoot.
- Consumable items used during the assignment.
These expenses are much easier to demonstrate as being wholly and exclusively for business purposes.
How JP Blackmoor can help
Every Situation Is Different
Tax isn’t always black and white, and small differences in the facts can completely change the outcome.
If you’re unsure whether a cost qualifies as a business expense, it’s always worth seeking professional advice before submitting your tax return.
At JP Blackmoor, we help businesses navigate these grey areas every day, ensuring they claim everything they’re entitled to, without taking unnecessary risks with HMRC.
Disclaimer: This article provides general guidance only and should not be relied upon as tax advice. Tax legislation and case law are subject to change, and every taxpayer’s circumstances are unique. Professional advice should always be sought before making decisions based on your own circumstances.
Sources
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Income Tax (Trading and Other Income) Act 2005, Section 34 – Wholly and exclusively rule.
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HMRC Business Income Manual BIM37600 – Wholly and exclusively: dual purpose and apportionment.
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HMRC Business Income Manual BIM37610 – Travel expenses and dual purpose, including discussion of Bowden v Russell & Russell.