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HMRC internal manual

Employment Income Manual

The general rule for employees: expenses: wholly and exclusively

To be deductible from the earnings of an employment an expense must be incurred wholly and exclusively in the performance of the duties of the employment. The words “wholly” and “exclusively” prevent a deduction for expenditure that serves a dual purpose, a business purpose and a non-business purpose. The wholly and exclusively rule does not apply to travel expenses.

An example of dual purpose expenditure is money spent on ordinary clothing that is worn at work. Clothing that is worn both in work and out of work obviously has a dual purpose and so no deduction is allowed. However, even if the clothing is only worn at work no deduction is allowed. This is because at one and the same time the clothing has the purpose of providing cover and comfort to the employee as well as the purpose of being suitable for work, see EIM31663.

You can allow a deduction for the whole or part of a single expense that has a dual purpose in 2 circumstances:

  • where an apportionment can be made between a part that is incurred wholly and exclusively in the performance of the duties of the employment and a part that is not, an apportioned part can be deducted
  • where the non-business purpose is merely incidental the whole expense can be deducted.

Example EIM31665 deals with an expense that cannot be apportioned. Example EIM31617 deals with a benefits charge that can be apportioned.