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HMRC internal manual

Employment Income Manual

The general rule for employees' expenses: do not be overly restrictive

Because the general rule for employees’ expenses is extremely restrictive it is tempting to conclude that no expense could ever be deductible. However, the rule is intended to permit some deductions. We must apply the rule strictly but fairly to ensure that deductions are permitted where they are due.

The facts of each case must be considered on their merits, as this comment by Lord MacDermott CJ in Elwood v Utitz (42TC482) implies:

“A number of the decisions on Section 198(1) [Section 336 ITEPA 2003] may seem to make hard law when viewed in the light of their particular facts, but there is no question of Section 198(1) being subject to some special canon of construction. The fence round it is no higher than that raised by the language it employs, and any attempt to make it higher than that or to argue from the facts of one case to the different facts of another merely because both seek relief under Section 198(1) is I think a mistaken approach.”