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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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The general rule for employees’ expenses: wholly and exclusively: apportionment: decided cases in which apportionment was permitted

The practice of apportioning expenditure where a definite part can be identified asincurred wholly and exclusively for a particular purpose has been approved by the Courts.

For example, a similar “wholly and exclusively” rule applies to deductions forTrading Income purposes. In the Trading Income case of Caillebotte v Quinn (50TC222)Templeman J commented:

“It is possible to apportion the use and cost of a room on a time basis, and toallow the expense of the room during the hours in which it is used exclusively forbusiness purposes, in the same way as it is possible to calculate the business expenses ofa car which is sometimes used for business purposes exclusively and sometimes used forpleasure.”