For expenses to be deductible from a taxpayer’s earnings, they had to be necessarily incurred in the performance of his duties and not simply because he was obliged by his contract to incur them.

Mr Justice Patten so held in the Chancery Division on May 9, 2007 when allowing an appeal by the Revenue and Customs Commissioners against the decision of the Bolton General Commissioners that Dr Bart Jozef Decadt’s expenses for examination fees, associated accommodation and travelling expenses could be deducted from his earnings under section 336(1) of the Income Tax (Earnings and Pensions) Act 2003.

The taxpayer was employed as a specialist registrar in general surgery and under his employment contract was to attend training courses so he could obtain a certificate of completion of specialist training.

He was awarded the certificate at the end of his contract and deducted the cost of his examination fees and associated costs from his earnings.

HIS LORDSHIP said that it was clear from the authorities that for expenditure incurred as a term of an employment contract to be deductible, it had to be incurred not only as an obligation of employment but also necessarily in the performance of employment duties.

The training better qualified the taxpayer to practise as a surgeon but was not necessary in the performance of his duties.

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