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HMRC internal manual

Employment Income Manual

Deductions from earnings: capital allowances: meaning of

Section 36(1)(b) CAA 2001The test in Section 36(1)(b) CAA 2001 is what the duties themselves require rather than what the employer or employee says is necessary (see

EIM36550). Nevertheless, if you are dealing with a doubtful claim you should establish the position of the employer at an early stage.

If the expense is substantial, it would be reasonable to expect the contract of employment to include a specific reference to the requirement to incur it. If there is nothing explicit in the contract, find out whether the employee has approached the employer to provide the item, or to reimburse its cost, and, if so, with what response. If the employer is not prepared to bear the cost and advances the view that the expense is not considered necessary this will clearly weaken the taxpayer’s claim, though without being entirely conclusive.

You may also need to investigate whether other workers with similar duties have also incurred the same sort of expense and if not, how they manage to perform their duties.