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Employees expenses - is the tide turning in the employee’s favour?

In a recent High Court case (HMRC Commissioners v. Banerjee) the Court held that training costs incurred by a consultant dermatologist were an allowable cost for tax purposes. In order for this to be the case, the dermatologist needed to show that she had incurred the costs wholly, exclusively and necessarily in the performance of the duties of her employment. 

In this instance it was held that the training was an intrinsic part of the job that she was paid to perform and was, in fact, required under the terms of her contract of employment in that she would not have been allowed to continue in employment had she failed to attend the external training sessions, and her compliance at these was monitored. 

I have to say that this did not stop HMRC contending that expenditure incurred in performing the duties of a training contract could not be expenditure incurred in performance of the duties of employment!

The good news, however, is that they lost. On this basis it may be worth having another look at costs incurred.

Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author.



Date: 24th July, 2009
Author: Cathy Corns


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