| Employment Income: Deductions and Expenses |
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Where a person wears ordinary clothes but of a standard required by the employer, no part of the cost is deductible.108 However, where a car is being used sometimes for business purposes and sometimes for personal purposes, part of the costs are allowable. The distinction between the two cases is that when the car is being used for business purposes it is being used only for those purposes, whereas when the clothes are worn at work they have a dual purpose, part—business, part—personal.109 Therefore, where a telephone is used partly for business calls the taxpayer can deduct the business calls but not the others; in theory, there is no deduction for any part of the telephone rental.110 |
18A.3.4 Miscellaneous Non—Travel Provisions |
18A.3.4.1 Entertainment Expenses |
TA 1988, section 577 prohibits the deduction of relevant business entertainment expenses not only under schedule D but also under ITEPA (schedule E).111 This could lead to a double non—deduction if the employee incurs an expense which the employer reimburses, or where the employee is given an allowance for the purpose. Not only is the employee taxable in respect of the reimbursement or allowance but the employer is unable to deduct the expense of reimbursement or allowance. Under these circumstances the employee is not taxable on the reimbursement or allowance.112 |
18A.3.4.2 Retirement |
Payments to pension schemes are deductible under the relevant legislation (see chapter 56 below). |