The Commissioners for HMRC v Jayanth Kunjur
[2023] UKUT 154 (TCC)
Dr Harry Nduka v The Commissioners for HMRC
15 May 2023
[2023] UKFTT 420 (TC)
First-tier Tribunal
A doctor tried to deduct many expenses from his taxes. He didn't have enough proof, and the judge only let him deduct one small fee. The rest were rejected because he didn't show they were truly work-related.
Key Facts
- •Dr Nduka claimed £43,500 in employment expenses for the 2016-17 tax year, primarily legal fees related to a GMC dispute.
- •HMRC initially amended his return, removing all expenses; Dr Nduka appealed.
- •The appeal was initially delayed due to a scheduling error.
- •Dr Nduka provided inconsistent and insufficient documentation to support his expense claims.
- •The Tribunal found Dr Nduka to be an unreliable witness due to inconsistencies and lack of evidence.
- •Expenses included legal fees, travel and accommodation costs, professional subscriptions, dental treatment, training costs, and computer costs.
Legal Principles
Deductibility of employment expenses requires that the expenses be wholly, exclusively, and necessarily incurred in the performance of the duties of the employment.
Income Tax (Earnings and Pensions) Act 2003 (ITEPA), s 336(1)
Travel expenses between home and a permanent workplace are considered ordinary commuting and not deductible.
ITEPA, s 338(2)
Legal costs incurred to maintain employment are not deductible; they must be incurred in the performance of duties, not to enable the performance of duties.
Ben Nevis v HMRC [2001] STC (SCD) 144; Eagles v Levy KB 1934 19 TC 23
Accommodation costs are generally not deductible unless wholly and exclusively for business purposes and necessary for the job; the cost must be necessitated by the duties of employment.
McKie v Warner (1961) 40 TC 65; Parveen v HMRC [2016] UKFTT 823 (TC)
Training costs are not deductible if the training is to put the employee in a position to perform their duties, rather than being undertaken in the performance of duties.
HMRC v Banerjee [2010] EWCA Civ 843
Childcare costs are generally not deductible as they are personal expenses.
Halstead v Condon (1970) 46 TC 289; Carney v Nathan [2003] SpC 347; Lorber v HMRC [2011] UKFTT 110
Computer costs are only deductible if the computer is necessarily provided for use in the performance of duties, and any private use requires apportionment.
Capital Allowances Act 2001 (CAA), s 36(1)(b); CAA s 205
Professional fees are deductible if the duties involve the practice of the profession and registration/certification is a condition of practice.
ITEPA s 343(1)
Outcomes
Appeal allowed in part.
Only the professional subscription to the RCOG (£499) was deemed allowable.
All other expense claims were disallowed.
Insufficient evidence, inconsistent testimony, and failure to meet the legal requirements for deductibility.