BIM37920 - Wholly & exclusively: expenditure having an intrinsic duality of purpose: food and drink
Carpenter eats to live
The case of Caillebotte v Quinn [1975] 50TC222, is described at
BIM37660.
Where food and drink is consumed for the purpose of
sustenance there will be an inevitable private purpose to the
expenditure. Lord Templeman explained the taxpayer’s basic
difficulty with the legislation and gave a prosaic example. A
Schedule D taxpayer, like any other taxpayer, must eat to live. No
part of the cost of Quinn’s lunch was laid out wholly and
exclusively for the purposes of his trade as a carpenter.
You should therefore disallow the costs of ordinary meals
that serve the function of sustaining the taxpayer. It is
immaterial that the physical demands of the taxpayer’s
occupation require a greater consumption of food or that the
location of the work place imposes a greater cost.
For those who do not have ready access to tax case volumes,
the part of Lord Templeman’s judgement explaining why no
deduction was due is set out below, 50TC226F to 226I:
The problem revolves round [what is now ICTA88/S74 (1)(a)], which, so far as material, provides that:
‘in computing the amount of the profits or gains … no sum shall be deducted in respect of-(a) any disbursements or expenses, not being money wholly and exclusively laid out or expended for the purposes of the trade …(b) any disbursements or expenses of maintenance of the parties, their families or establishments, or any sums expended for any other domestic or private purposes distinct from the purposes of the trade, profession or vocation’.
A Schedule D taxpayer, like every other taxpayer, must eat in order to live; he does not eat in order to work. Mr. Medd, for the Crown, submits - and I accept - that in these circumstances no part of the cost of Mr. Quinn’s lunch was ‘exclusively … expended for the purposes of’ his trade as a carpenter. The cost of tea consumed by an actor at the Mad Hatter’s Tea Party is different, for in that case the quenching of a thirst is incidental to the playing of the part. The cost of protective clothing worn in the course of carrying on a trade will be deductible, because warmth and decency are incidental to the protection necessary to the carrying on of the trade. There is no such connection between eating and carpentry. The Commissioners appear to have derived some assistance from the fact, which they found, that Mr Quinn’s appetite at work exceeded his appetite at home, and from Mr. Quinn’s evidence, which they accepted, that he did not regard lunch as a personal habit. In this Court Mr. Nolan, who appeared for Mr. Quinn, disclaimed any such assistance.
