E3. Trading expenditure

- Health

​

Normally has an unavoidable dual purpose

- Expenditure on health normally has an additional purpose being the "advantage and benefit of the taxpayer as a living human being" (Norman v. Golder).

- Norman v. Golder - T was a shorthand writer who fell ill as a result of 'working in unfavourable conditions in the courts' and incurred medical expenses which he sought to deduct.

- Held: not deductible due to the additional purpose of the advantage to T as a living human being.

- Murgatroyd v. Evans-Jackson - T (trade mark agent) sought to deduct 60% of the cost of nursing home charges following a ruptured spinal disk. T had declined a bed in the NHS because it would have been impossible for him to conduct his business. The nursing home provided a private room with the necessary facilities.

Held: Not deductible. Although T could have gotten the treatment for free (unlike in Norman), "it would offend common sense to say that at any rate one of his motives or purposes in going into the nursing home was not to receive treatment for that injury" which benefit would enure to him as a living human being.

​​

Health expenditure on matters that would be so trivial as to lead to no expenditure apart from the trade

- Prince v. Mapp: "It is quite easy to think of instances in which someone carrying on a trade or profession incurs some injury which is trivial in itself and in respect of which he would never otherwise expend money on medical care but which happens to be of vital importance for the purpose of that particular trade or profession."

​

Health expenditure dictated by special needs of trade

- Where medical expenses are of a special character dictated by T's trade as a matter of physical necessity, those costs may be wholly and exclusively for the purpose of the trade, with the personal benefit of such treatments may be regarded as an effect (Parsons, §33).

- Parsons - T was a stunt man. His decision to pay for a private knee operation rather than wait for the NHS was only because of the particular demands of his work and allowable (§38).

- Same applied to chiropractor (§40) and masseur (§41) expenses.

- Query what difference it would have made if the injuries were sustained outside of his work as a stuntman.

- Expense of maintaining general fitness was not allowed (§48). Might have been different if they were the specific costs of maintaining skills necessary to be on the stunt register (§47).

- HMRC accept this - see BIM50620 (in relation to professional athletes).

- "For example, physiotherapy treatment in the course of a competition or immediately before or after an event where any personal benefit is marginal may be deductible. Similarly, nutritional advice, supplements and training costs where the advice etc was so specific as being directly tailored to the particular athletic discipline may be deductible. A similar rationale may be applied to medical expenses although it must be noted that it will be more exceptional for medical costs to be allowable." (BIM50620).

- Described in McMahon as "nothing more than recognition of what Lord Brightman said in Mallalieu v Drummond in relation to purpose and effect." (§42).

​​​​

T's trade is also his hobby

- Even where health expenditure might be said to be dictated by the special needs of the trade, if T's trade is also a hobby, there will be a dual purpose. 

- Prince v. Mapp: T was a contract engineer. T also played guitar both as a hobby and as a spare-time occupation. T injured his little finger which prevented him playing guitar properly. T paid for an operation to fix this and sought to deduct the cost.

- Held: not deductible. T underwent the operation to be able to continue playing guitar, with no distinction as to hobby v. occupation. 

- "I would mention in passing that if the finding had included the word 'professionally' (ie if it had read 'He would not have undergone it had he not wished to continue to play the guitar professionally') the result might I think have been otherwise." (at 525).

​

Legislation: 

Cases: 

Norman v. Golder [1945] 1 All ER 352 (CoA);

Prince v. Mapp [1970] 1 All ER 519 (Pennycuick J); 

Murgatroyd v. Evans-Jackson [1967] 1 All ER 881 (Plowman J); 

Parsons v. HMRC [2010] UKFTT 110 (TC), Judge Staker;

McMahon v. HMRC [2013] UKFTT 403 (TC), Judge Cannan; 

HMRC manuals: BIM50620; 

Commentary: 

See also:

​