Employment Income: Deductions and Expenses

19

These figures were increased following the abolition of capital allowances for mechanically propelled road vehicles and cycles in 2001.⁷³ However, they apply only to exempt qualifying payments not to allow a deduction.

Mileage allowances—the difference between the Revenue’s estimate of running costs and the higher figures paid by companies are considered to be remuneration and, as such, taxable. Figures published by motoring organisations often include the costs of breakdown recovery and of interest foregone on the value of the car—which are clearly liable to tax.

18A.3    Expenses Other than Travelling Expenses

Like travelling expenses, non—travelling expenses must be incurred in the performance of the duties of the office or employment and necessarily be so incurred. In addition, these other expenses must also be incurred wholly and exclusively in the performance of those duties. The words of TA 1988, section 198 were described by Vaisey J⁷⁴ as being ‘stringent and exacting; compliance with each and every one of them is obligatory if the benefit of the rule is to be claimed successfully. They are to my mind, deceptive words in the sense that when examined they are found to come to nearly nothing at all.’

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