BIM37610 - Wholly & exclusively: duality of, or non-trade, purpose: travel costs: overseas conference plus holiday

Mixed holiday and business trip

Where you establish duality of purpose in travel, the costs are disallowable. No part of the expenditure is referable wholly and exclusively to the trade, profession or vocation.

In Bowden v Russell & Russell [1965] 42TC301, a Mr Taylor, a solicitor visited America and Canada with his wife to attend, in an unofficial capacity, the annual meeting of the American Bar Association in Washington and Empire Law Conference in Ottowa. Taylor’s law practice was not of an international nature.

Taylor claimed the costs of the visit, excluding his wife’s expenses. Taylor gave the following reasons in support of the claimed deduction:

• to maintain his status as a solicitor;
• to improve his reputation in the UK; and
• to increase his clientele.

Taylor conceded that it was also his intention to have a holiday with his wife at the same time. Taylor did not weigh the cost against the prospective benefit to his practice, thinking it essential that he did attend. As a result of his examination of other solicitors' methods Taylor had introduced an electric typewriter for greater efficiency and other changes were under consideration.

The Crown advanced two arguments against deduction:

• first, the subject matter of the two conferences was remote from the work of Taylor’s firm (‘remoteness’ - see BIM37200), and
• second, the purpose of Taylor’s visit was not exclusively to enable him to attend the conferences but substantially included holiday and social purposes (duality).

Pennycuick, J approved the words of Romer LJ in Bentleys, Stokes and Lowless v Beeson [1952] 33TC491 (see BIM37400) and disallowed the whole of the expenditure. This was because of the Commissioners’ finding of fact that Taylor intended to have a holiday at the same time as the conference. No allowance was due because the expenditure was incurred for a dual purpose. Pennycuick, J expressed no opinion on the question of remoteness of the subject matter of the conferences from the work of the firm. Because the taxpayer had admitted in evidence before the Commissioners that the travel was undertaken in part for the purpose of having a holiday, Pennycuick, J found the costs to be inadmissible, 42TC lower half of page 306: