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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Specific deductions: security expenditure: conditions

S81 Income Tax (Trading and Other Income) Act 2005

All the following conditions must be satisfied for a deduction for personal security expenditure to be allowable:

  • there is a special threat to the trader’s personal physical security which arises wholly or mainly because of the particular trade;
  • a service or asset is provided or used by or provided for the trader to meet the threat;
  • the sole object of the person incurring the expenditure is the meeting of the threat;
  • a deduction of the expenses would not otherwise be allowable in calculating the profits of the trade because (and only because) they were not incurred wholly and exclusively for the purpose of the trade;
  • in the case of a service, the benefit resulting to the trader is wholly or mainly an improvement of the trader’s personal physical security;
  • in the case of an asset, the person incurring the expenditure intends the asset to be used solely or partly to improve personal physical security.

The conditions are intentionally tightly drawn and are intended for people whose trade exposes them to a very real threat to their physical safety from terrorists, extremists and others who may resort to violence. It follows that a deduction cannot be given for:

  • security measures against the kind of general criminal threat which all citizens may face to a greater or lesser degree, for example when travelling home late from work; or
  • expenditure incurred primarily to meet a threat to property (including cash and other personal belongings); or
  • security measures taken against a threat unconnected with a person’s trade.

Cases in which there is doubt or dispute over whether there is a threat to physical security should be referred to CTISA (Technical).