SSCS Income – earnings of self-employed earner – whether motoring expenses and telephone expenses for both business and personal use may be apportioned – whether bad debts deductible – whether capital drawings relevant
The claimant, who was self-employed in partnership with her husband and supplied accounts of the business, claimed family credit. The adjudication officer in awarding family credit did not allow amounts shown in the accounts for depreciation, bad debts, lunches, private motoring expenses and the private use of the telephone. The claimant appealed against the decision. In his submission to the tribunal the adjudication officer said that since the claimant and her husband had taken two weeks holiday during the period of the accounts, the calculation of earnings should have been based on a fifty week assessment period. The tribunal, in allowing the appeal, directed that the award of family credit be recalculated to allow as expenses bad debts, lunches, private use of the telephone and private motoring expenses. The adjudication officer appealed to the Commissioner.
Held that:
expenses that could be apportioned were motoring expenses including road fund licence, insurance and repairs and maintenance, and telephone expenses including rental charges. (Insofar as the Adjudication Officers’ Guide was inconsistent it was not to be followed R(SB) 28/84 cited). Apportionment by tax inspectors was cogent evidence of the amount used for the business and should be accepted in the absence of contrary evidence;
bad debts relevant to the period were deductible; entertainment lunches were not (paras. 36 and 37);
capital drawings should be treated as such; where there was a dispute as to whether a sum was capital or income commercial accounting principles were to be followed, unless they conflicted with the regulations (para. 38);
the effect of holiday and the application of the change in the regulations on 12 September 1988 was considered at paragraphs 1(8) and 24 and the first appendix.
Citations:
[1991] UKSSCSC CFC – 25 – 1989
Links:
Citing:
Cited – Bates v Inland Revenue Commissioners HL 1968
Section 402, on its plain meaning, produced results in some cases which were ‘monstrous’ and which Parliament can never have intended. The Commissioners had not sought to amend the legislation, but realising the monstrous result of giving effect to . .
Lists of cited by and citing cases may be incomplete.
Benefits
Updated: 15 July 2022; Ref: scu.269588
