Going Loco over Locum – A Tax Appeal Case

by | General, Inside News

A recent Tax Appeal Case centred on a doctor who operated as a locum through a company and employed his family members.


  • A doctor provided Locum Services
  • He formed a Limited company with his wife  – 50% shareholding each.
  • The company provided the services of the appellant as a medical consultant to a locum agency.
  • During the relevant years the Appellant provided his services to a single hospital.
  • The company employed the appellant’s wife and two sons. There were no contracts of employment.
  • The sons were paid cash on an ad hoc basis from the Appellants personal resources.
  • Travel and subsistence expenses were claimed by the appellant in this period.
  • The Appellant was the subject of an Aspect Query in relation to 2016 and 2017
  • As a result the taxpayer was issued with amended assessments for a further liability in both years.
  • The amended assessments disallowed the travel and subsistence expenses claimed by the taxpayer.
  • They also disallowed the salaries paid to his wife and sons, only allowing a reduced amount paid to his wife for acting as a director/co. secretary.

Appellants Position

His wife provided various office duties, organising his contracts and his attendance at two major conferences. She also provided some company secretarial support.

His sons provided transport facilities to his place of work and some minor filing activities.

He claimed travel and subsistence expenses for his travel to and from the hospital where he worked,

Revenue’s Position

The sums paid to the taxpayer’s family members were not commensurate with the duties carried out.

In fact, there was no evidence that the sons performed any duties, neither was there any record of payments made to them for their work.

All of the travel and subsistence expenses were disallowed. There is a difference between travelling to perform your duties as opposed to travelling in the performance of your duties. The Appellant did not travel to the hospital in the performance of his duties but was merely travelling in order to perform his duties.

The expenses were not incurred wholly and exclusively in the performance of his duties

Revenue made reference to three cases: Ricketts v Colquhoun, Miners v Atkinson and Taylor v Provan. These are standard precedent cases on expenses of travel.

In fact, the tax payer was claiming for subsistence on the double, using Civil Service rates and also claiming for diesel.


The commissioner considered that there was no genuine employment relationship between the Appellant and his wife and sons. There was no evidence that they carried out work equal to the amounts paid to them. There was no evidence of any actual payments made to the sons.

The travel and subsistence payments and other office expenses were not incurred wholly and exclusively in the performance of the taxpayer’s duties.

The commissioner therefore determined the taxpayer had failed in his appeal against the amended assessments.


Care must be taken when employing family members to work in a business.

  • There should be a contract for the employment
  • The family members must actually work in the business.
  • The pay must be commensurate in relation to the actual duties carried out.

With regard to travel and subsistence

  • The expense must be incurred “wholly and exclusively in the performance of the duties “
  • Travel expenses to and from a normal place of work are not allowable.
  • Comprehensive records should be kept of trips, along with receipts.

Please reach out if you have any queries regarding these scenarios, or indeed, if you require any tax advice.

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