| 22/8/2008 |
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| Court of Appeal - Decisions in Income Tax Cases |
| Case No: 58 |
Decided on 13 March 1965 |
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Capital Allowances In The Case Of Employment Income. An Employee Does Not Exercise A Vocation For Tax Purposes
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This case was decided before an amendment to the law made capital allowances available (in appropriate cases) against all sources of income. At the time in question these were only available against income from a trade, business, profession or vocation.
The taxpayer was employed with Government on the basis that he had to make available his own van (against only minor compensation). The Revenue had allowed no deduction whatsoever in respect of the van. These were fully allowed by the Board, including capital allowances. The latter were allowed on the basis that the taxpayer could be said to be exercising a vocation, a word of wide import. The Revenue appealed against the decision in so far as it admitted such allowances.
The Court agreed that this was a hard case (the economic side of the taxpayer's employment was very poor), but there was no doubt that his income was taxable as income from employment. It was also clear that capital allowances could only be granted against income arising from a trade, business, profession or vocation. Since there had to be a link between an expense and the income which it helped to produce and 'there was no equity about a tax', the grant of capital allowances had to be ruled out.
BSC Case No: 16/63
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