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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Deductions from earnings: capital allowances: meaning of

Section 36(1)(b) CAA 2001The phrase ‘necessarily provided for use in the performance of the duties’ in the capital allowance legislation imposes the same objective test as that in the general rule for employees’ expenses in Section 336 ITEPA 2003 (see

EIM31640 and EIM31645).

Capital allowances are not due for expenditure on items which employees provide simply for their own convenience or for other reasons personal to themselves, even if they do in fact use the items in carrying out their work.

To qualify for capital allowances, the duties of an employee must objectively require the use of the machinery or plant. In a disputed case, it is important to establish
* what the employees’ duties require (see EIM36550) and * whether it was necessary for the employees to provide the items themselves. It will not have been necessarily provided by the employee if the employer is willing to provide or pay for it (see EIM36560). Note that the machinery or plant does not have to be ‘wholly and exclusively’ used for the performance of the duties. If there is private use the allowances can be apportioned (see