BIM37615 - Wholly & exclusively: duality of, or non-trade, purpose: travel costs: overseas conference
Allowable if no non-trade purpose
Where the sole purpose of travel is wholly and exclusively for the purposes of the trade, profession or vocation then the cost will be allowable notwithstanding some incidental private benefit. It is important to bring out before the tribunal the evidence in support of any contrary arguments. Failure so to do restricts what may be argued in the courts.
In the case of Edwards v Warmsley Henshall & Co [1967] 44TC431, a deduction was allowed for the costs incurred by a partner, a Mr Evans, in a firm of chartered accountants practising in Chester in attending the Eighth International Congress of accountants in New York.
There was no evidence before the Commissioners to show that Evans also intended to have a holiday whilst in New York. The flight arrangements allowed extra days beyond the conference but this is because a charter flight was chosen (at a significant cost saving over scheduled flight) and this determined the duration of stay in America. Evans made no claim for the expenses that he incurred on the non-conference days.
The Crown argued that the remoteness of the subjects discussed did not warrant such a small firm sending a partner. In the court the Crown sought to argue that there was duality of purpose in that Evans attended the conference both as a partner in Warmsley Henshall and to further accountancy in general. On the evidence before them the Commissioners were entitled to come to allow the deduction. Cross J declined to remit the case to the Commissioners and dismissed the Crown’s arguments.
For those who do not have ready access to tax case volumes, the part of Cross J’s judgement on which the above guidance is based is set out below, 44TC head of page 439:
The Crown, as I see it, must take the consequences of not having raised before the Commissioners the question of ‘duality’ of purpose as between the interests of the firm and the interests of the profession. They allowed the Commissioners to proceed on the footing that, if they rejected the contention that Mr. Evans had other reasons for going to America beyond that of attending the congress, the only question for them to ask themselves was whether the nature of the congress was such that the partners could not reasonably think that the profit-earning capacity of the firm would be furthered by Mr. Evans's attendance at it. In deciding that the partners could reasonably take the view that the interests of the firm would be advanced, the Commissioners may possibly have taken into account considerations which, if the argument of the Crown is correct, they ought to have disregarded. But if and so far as they did so the Crown is itself to blame. On the evidence put before them and in the light of the submissions made to them the conclusion at which the Commissioners arrived was, as I see it, a conclusion at which it was open to them to arrive and with which I ought not to interfere.
