BIM42101 - Deductions: scope of: starting
point
What can be deducted?
You cannot deduct expenditure in computing the profits of a
business for income tax purposes if, either:
- it falls within the scope of any of the prohibitions specified
in The Taxes Acts (for example entertaining, ICTA88/S577), or
- it is not a proper debit item to be charged under ordinary
commercial principles against the incomings of the business in
computing the balance of the profits.
See Usher's Wiltshire Brewery Ltd v Bruce, 6TC399 (see
BIM37200); Atherton v British Insulated
& Helsby Cables Ltd, 10TC155 (see
BIM35010); Morley v Lawford & Co,
14TC229 (see
BIM37780)).
