EIM42430 - Employment income: basis of assessment for general earnings: timing of expenses deductions

Allow deductions for expenses in the year the money is spent. The general rule for employees’ expenses provides for a deduction where the taxpayer has been obliged to "incur and pay" expenses (see EIM31620 onwards). Merely incurring a liability therefore is not enough; there must be an actual outlay.

Enquiries into the timing of expenditure are best reserved for cases of doubt and the largest cases where substantial amounts are at issue. Even then resources are usually better spent in checking the expense qualifies for deduction at all rather than querying the year of deduction.