Accident on the way to work – how the tax authorities contribute to costs

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Income tax return

In Annex N, employees can enter advertising costs.

(Photo: dpa)

Munich Whether indebted or caused by others: an accident can hit even the most careful drivers. Anyone who gets away with sheet metal damage can be reasonably lucky. Such an experience becomes an absolute nightmare for everyone who sustains injuries. This feeling is further increased if they subsequently incur costs for the treatment.

This horror scenario came true for a car driver who had an accident on the way home from work. She suffered serious injuries to her face and nose. After an initial correction of the broken nasal bone a few days after the accident, a second operation was necessary two months later to completely straighten the nose. The responsible trade association took over the expenses according to the case flat rate. The victim bore further costs himself.

In her income tax return, the driver claimed her self-borne medical costs incurred indirectly as a result of the car accident as advertising costs for income from non-self-employed work. However, the competent tax office refused to do so. Reason: The expenses were already covered by the distance lump sum, also known as commuter lump sum. The Finanzgericht Baden-Württemberg also followed this assessment.

The Federal Finance Court (BFH) disagreed in the subsequent revision. The judges confirmed that the distance allowance covers all costs incurred by the trip between home and work. However, this is limited to the pure expenses for vehicle use and distance. Excess expenses would not be included in the flat rate (Az: VI R 8/18). With this assessment, the BFH shares the view of the Federal Ministry of Finance that accident costs are deductible as advertising costs in addition to the distance allowance.

In their reasoning, the judges referred to the purpose of the distance flat rate. The aim is to favor the costs that workers incur for their mobility. According to the BFH, this also results from the fact that the flat rate was introduced for transport policy reasons. This is made clear, among other things, by the fact that it relates to the distance covered.

Medical treatment costs, on the other hand, do not count towards mobility costs, since they are neither vehicle-related nor travel-related. This also applies if they were necessary due to an accident on the way between home and work. However, the situation is different with property damage. The BFH has clarified that expenses for the repair of the accident vehicle cannot be applied in addition to the distance lump sum.

Practical tip:

Workers who have had an accident on their way to work should collect all related evidence. This is the only way the tax office recognizes the expenses. In addition to invoices – for example for medical treatment – these are also the police report or proof of reimbursement received from the insurance company or a professional association. If the costs incurred are advertising costs, they are recorded in the income tax return in “Appendix N”.

Is this tax tip interesting for you? You can find more articles at our cooperation partner Haufe.de.

More on the subject: Tax declaration guide 2019 – How to get the most out of the tax authorities

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