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HMRC internal manual

Employment Income Manual

The general rule for employees’ expenses: get the facts

The language of the general rule for employees’ expenses has remained largelyunaltered for a very long time. Over time a large body of case law has developed as aguide to interpretation. Throughout the case law the Courts have emphasised the importanceof finding all of the facts before applying the rule. For example in Taylor v Provan(49TC579), Lord Morris of Borth-y-Gest commented:

“In considering in any particular case whether the wording of [Section 336 ITEPA2003] is applicable it seems to me that it is first essential to have clear and explicitfindings of fact. Thereafter the application of the words of the [section] should not inmost cases present much difficulty. …In the first place, it will be necessary to knowwhat exactly was the office or employment that the person held. In the second place, itwill be necessary to know what exactly were the duties of the office or employment.”