Update on what makes a professional expense allowable in your tax return

25 October 2013

Update on what makes a professional expense allowable in your tax return

Update on what makes a professional expense allowable in your tax return

 

Courses/Seminars

Courses and Seminars may be required by your professional body, however under tax law relief for expenses such as these is quite stringent.

The general rule for employee’s expenses is Section 366, Income Tax (Earnings and Pensions) Act 2003. It is very restrictive and has been considered by the Courts over the years. All of the tests imposed by Section 336 must be passed before a deduction is obtained. The tests are as follows:

·         The expense must be one that each and every holder of that employment would have to incur, and

·         The expense must be be necessarily incurred, and

·         The expense must be incurred in the performance of the duties of the employment, and

·         The expense must be incurred and paid, and

·         The expense must be wholly and exclusively so incurred.

 

Normal expenses in respect of courses and seminars are not allowable because they are not incurred “in the performance of the duties”. To qualify, the expenses must be incurred in actually carrying out of the duties of the job. It is not enough for the expense to be relevant to the job, or to be incurred in connection with the duties of the job. Nor is it enough if the expense only puts you in a position to start work or keeps you qualified to do the work.

Expenses that are incurred in preparation to carry out the duties of the employment are not allowable.

 

 

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