The taxpayer, a general surgical registrar, had a contract, requiring him to attend training courses and to obtain a specialist training certificate in order to qualify as a consultant surgeon. Clause 6 of his contract recorded that he had been issued with a National Training Number and clause 7 provided that his appointment was dependent upon his continuing to hold that number and required him to take all reasonable steps to secure the issue of a Certificate of Completion of Specialist Training. His contract was of a type set up to encourage doctors to qualify as specialist surgeons. He incurred expense in pursuing the required training. The General Commissioners allowed the taxpayer’s appeal that he should be allowed to deduct such expense under the successor provision to section 198(1).
Held: HMRC’s appeal succeeded. Patten J said: ‘It has been decided by a series of cases that, for expenditure which is incurred as a term of a contract of employment to be deductible it has not only to be incurred in the sense that the taxpayer is obliged to incur it as part of his employment, but it has to be necessarily incurred as a result of the nature of the duties of the employment.’ and ‘ For the purposes of this appeal I am prepared to accept that the respondent is correct, and that under the terms of the contract there is an obligation on him to undergo the course of training referred to and to sit the examinations, which he has done with the consequent expense. That course of training I do not doubt for a moment, better qualifies him to practise both as a specialist surgical registrar and in due course as a consultant surgeon, but it is clear from the authorities that I have referred to that the fact that the training in question is mandatory under the terms of the training proper, is not enough to render the relevant expenditure allowable. As Dr Brice indicated in her judgment, the cases distinguish between time spent undergoing clearly relevant and perhaps on one view, necessary training, from time spent in actually carrying out the duties of the office or employment in question. The costs and expenses involved in undergoing training to qualify the taxpayer to carry out those duties are not themselves deductible as expenditure within the meaning of s. 336 of [the Income Tax (Earnings and Pensions) Act 2003].
The General Commissioners approached this matter simply by asking themselves whether or not it was a part or a term of the contract that Dr Decadt should obtain the CCST in order to become a specialist surgeon. They seem to have regarded that as decisive of the outcome of the appeal. In my judgment, that an error of law. It is clear, as I have already indicated, that the fact that the training is undergone as a term of the contract is not of itself enough.’
Judges:
Patten J
Citations:
[2008] STC 1103
Statutes:
Income Tax (Earnings and Pensions) Act 2003, Income and Corporation Taxes Act 1988
Jurisdiction:
England and Wales
Cited by:
Cited – HM Revenue and Customs v Banerjee CA 28-Jul-2010
The taxpayer doctor had claimed against her income tax, the costs of attending training courses required under her employment contract and for professional development. The Revenue appealed against a decision allowing the expenses.
Held: The . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 04 October 2022; Ref: scu.421590