Non-business expenses
Employment Tax
Guidance
Introduction
In order for an expense to be tax deductible it must be incurred because of an employee鈥檚 employment. Any non-business related expense is, therefore, not relievable except in some very particular circumstances.
This guidance note deals with three separate issues. The first is where an expense has both a business and private element. In this case some, or indeed all, of the expense may be allowable. The second case is where an expense must be treated as a non-business expense and is not deductible for tax purposes. The third is expenditure which appears on principles to be non-business yet qualifies as non-taxable, usually due to statutory provision or HMRC concession.
Dual purposes
In order to claim a deduction for tax purposes, the expenditure must be incurred 鈥榳holly, exclusively and necessarily in the performance of the duties of the employment鈥�. This is discussed in the Expenses 鈥� general rule guidance note. If an expense is not incurred for these reasons then it is disallowed.
However, despite the strictness of this test, it is understood that there are instances
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