| 20/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 29/64 |
Decided: 3 February, 1965 |
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Deduction allowed in respect of subscriptions to a professional institute deemed to be necessary in order that an employee might continue in employment; but no deduction allowed for capital allowances and car running expenses as these are allowed only in trade, business, profession or vocation - article 11, now 26 Income Tax Act
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Appellant, an accountant employed with an accountancy firm, contested the Commissioner's refusal to allow a deduction in respect of car depreciation and running expenses and subscriptions to professional institutes.
The Board concurred with the Commissioner's decision in regard to appellant's demand for a depreciation allowance. No deduction could be allowed as such an expense, as set out in article 10 of the Act, being of a capital nature, is only allowed when such plant or machinery is employed in a trade, business, profession or vocation and not in the course of an employment.
The Commissioner's decision in regard to the car running costs was also agreed to. Such deduction could only be allowed in those cases where the expenses were wholly and exclusively incurred in the production of income. It had been established that it was not a condition of appellant's employment that he should own a car. His salary was not dependent upon his owning his own means of transport.
On the other hand it was a condition of appellant's employment that he should be a member of the Institute of Chartered Accountants and that he should continue to be a member during his employment. His membership was not merely, as was stated by Mr Justice Rowlatt, "to keep himself fit for what he is doing", but was necessary in order that he might continue to remain in employment. Such an expense had been incurred in the production of the income that was brought to charge and was, therefore, deductible.
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