Commentary

B2.458 Personal and related expenditure

Business tax
Business tax | Commentary

B2.458 Personal and related expenditure

Business tax | Commentary

B2.458 Personal and related expenditure

No sum is deductible in respect of any disbursements of the taxpayer, his family, or his establishment, or in respect of any sums expended for any other domestic or private purpose distinct from the purposes of the trade. This type of expenditure often carries some duality of purpose, which taints the trading purpose or renders it merely incidental, ultimately resulting in the expenditure being disallowable. Some of the commonly encountered personal expenses are discussed below.

Deductibility of expenditure on food and drink

In Quinn1, the extra cost incurred for lunches by a subcontracting carpenter when working away from home was disallowed.

The cost of providing food and drink at regular partners' meetings has been held not to be deductible2. The meetings took place every few weeks at lunchtime or in the evening to discuss partnership business. As the partners would normally have required food and drink at around those times anyway, the purpose of providing food and drink at the meetings was not exclusively a business purpose. Following the House of Lords decision in Mallalieu3 (see below), the personal element could not be said to be merely incidental. However, the cost of the partners' accommodation at an hotel for their annual weekend conference to discuss the partnership business was allowed as a deduction. The accommodation was provided so that the partners' business discussions could continue uninterrupted on the following day. It was therefore open to the appeal Commissioner to find that this expenditure was incurred exclusively for

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