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HMRC internal manual

Business Income Manual

Wholly and exclusively: expenditure having an intrinsic duality of purpose: surgery

S34 Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005)

Surgery to restore function after injury

The cost of surgery to ensure or restore good health is not allowable.

In the case of Prince v Mapp [1969] 46 TC 169, Mr Prince’s principal occupation was that of a draughtsman. He also carried on a spare-time activity as a professional guitar player and further - and this is an important point in the case - he played his guitar as a hobby. Unfortunately, Mr Prince cut the little finger of his left hand while sharpening a pencil at work. The injury did not heal and the top joint proved to be useless. It was necessary to perform an operation to enable him to continue to play his guitar.

The Special Commissioners found that the operation was undertaken to enable Mr Prince to play the guitar not only as a profession but also as a hobby and so disallowed the expenditure.

Pennycuick J expressed his opinion (although it does not form part of the decision and so is not binding) that medical expenses may satisfy the test for deduction in what is now S34(1)(a) ITTOIA 2005 on page 174:

`It is quite easy to think of instances in which someone carrying on a trade or profession incurs some injury which is trivial in itself and in respect of which he would never otherwise expend money on medical care but which happens to be of vital importance for the purpose of that particular trade or profession. In such a case I am prepared to assume in favour of the taxpayer here that it would be possible for a taxpayer to incur expense which was wholly and exclusively for the purpose of his trade or profession. I say I am prepared to assume. I do not give any decision upon it because on the particular facts of this case it is not necessary for me to do so.’

Pennycuick J went on to consider the way that the courts have interpreted the legislation in other cases and applied that interpretation to the facts as found by the Commissioners. See page 176:

`There is nothing in those sentences which confines the finding to a wish to continue to play the guitar professionally. It seems to me that that is a finding that he would not have undergone the operation if he had not wished to continue to play the guitar, and that must in the context mean had he not wished to play the guitar in the same circumstances as those in which he had hitherto played it, ie partly as a hobby and partly professionally. If that is a correct reading of the finding, as I think it is, then the Special Commissioners had material upon which they could reach their conclusion, and that is the end of this case.’

The operation therefore served a dual purpose of allowing Mr Prince to play professionally and also as hobby. Duality was fatal. In medical expenditure of this minor kind (unlike that where health considerations arise) there is no inevitable private purpose.


Cosmetic surgery

Where a person in the public eye claims a deduction for the cost of cosmetic surgery to correct some perceived inadequacy in their appearance, you need to examine whether one of the purposes in incurring those costs was to gratify their private wish to improve/change their appearance. If it was, no deduction will be due. Only in exceptional circumstances will an operation to change personal appearance by reversing or masking the advancing of the years not have a private purpose. You should invite the tribunal to infer the existence of a private motive unless there is compelling evidence to the contrary.