When deciding whether an expense is allowed or disallowed it is important to consider that the expenditure must be incurred wholly and exclusively for the purposes of your trade or employment.
Under the legislation any expenditure not incurred wholly and exclusively for the purposes of the trade, profession or vocation should be disallowed. HMRC takes a slightly more relaxed view that a strict reading of the legislation would suggest.
One of the main points HMRC examines when considering the application of the ‘wholly and exclusively’ test relates to apportionment and duality.
In this regard, HMRC’s internal manuals state that:
When you consider the application of the ‘wholly and exclusively’ test, it is important that you distinguish between cases where:
For example, when considering the running costs of a car used partly for the purposes of the trade and partly for other purposes, HMRC’s position is that the costs apportioned to the business use of the car would be deductible.
27/03/2024 - More...
HMRC has been forced into an embarrassing climbdown on plans to close the Self-Assessment, VAT and PAYE helplines from
27/03/2024 - More...
Earlier this month, saw the 10th anniversary of the StepChange Debt Charity’s annual Debt Awareness Week. This is
27/03/2024 - More...
The rules for individuals providing services via an intermediary such as a personal service company (PSC) are complex.
With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!
» Sign up for the Newsletter
» Login