Morgan v Tate & Lyle [1954] 35 TC 366
Citation:Morgan v Tate & Lyle [1954] 35 TC 366
Rule of thumb:What is the test for deductible business expenses in tax? If a person can prove that they literally could not have done the job without doing this, then this is the test for proving that the expenses were viable. If other expenses helped the job or made it easier then this is a grey area which is more debatable.
Judgment:
A different test to the ‘incidental’ test is the ‘capacity’ test. If someone can prove that they appeared in the capacity of their trade first and foremost then this is a good prima facie argument to make that these were trade expenses.
Ratio-decidendi:
‘A general test is whether the money was spent by the person assessed in his capacity of trader or in some other capacity; whether on the one hand the expenditure was really incidental to the trade itself or on the other hand it was mainly incidental to some other vocation or was made by the trader in some other capacity than that of trader.’ At 425 Lord Reid
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.