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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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The general rule for employees’ expenses: do not be overly restrictive

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

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

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