Dr Harry Nduka v The Commissioners for HMRC
[2023] UKFTT 420 (TC)
The Commissioners for HMRC v Jayanth Kunjur
10 July 2023
[2023] UKUT 154 (TCC)
Upper Tribunal
A doctor rented a place near the hospital because of on-call duties, but lived with his family elsewhere. He tried to claim tax relief for the rent. The court said no, because the need for the extra accommodation was due to his personal choice of where his family lived, not a requirement of his job.
Key Facts
- •Mr. Kunjur, a junior doctor, lived in Southampton but rented accommodation in Colliers Wood near his hospital in London due to on-call duties.
- •He claimed tax relief for the rental expenditure.
- •His on-call duties required him to be within 30 minutes of the hospital.
- •He performed both formal and informal on-call duties, including responding to calls and providing advice.
- •The FTT allowed a partial appeal, granting relief based on the proportion of time spent performing duties at the premises.
- •Mr. Kunjur withdrew his appeal before the Upper Tribunal hearing due to cost concerns.
Legal Principles
A deduction for expenses is allowed if the employee is obliged to incur them as a holder of employment, and the amount is incurred wholly, exclusively, and necessarily in performing employment duties.
Section 336(1) ITEPA 2003
The test of whether an employee is obliged to incur expenses is objective; it must be necessary for all employees in the same role, not just due to personal circumstances.
Ricketts v Colquhoun, Owen v Pook, Kirkwood v Evans, Lewis v Revenue and Customs Commissioners
Expenditure must be wholly and exclusively for employment purposes; no deduction is available if it serves a dual purpose, even if apportionable.
Bolam v Barlow, Hillyer v Leeke, Mallalieu v Drummond
Expenses must be incurred 'in the performance of the duties,' not merely to enable the performance of duties.
Elderkin v Hindmarsh, Ansell v Brown, Halstead v Condon, Fitzpatrick v Inland Revenue Commissioners (No 2)
Outcomes
The Upper Tribunal allowed HMRC's appeal.
The FTT erred in law on all three aspects of section 336 ITEPA 2003. Mr. Kunjur's rental expenses were not objectively obligatory for all junior doctors in his role; they served a dual purpose (personal and employment); and were not incurred 'in the performance of the duties' but rather enabled their performance.
Mr. Kunjur's appeal against the assessments was dismissed.
He was not entitled to any deduction for the rental expenditure.