| 17/5/2012 |
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| Board of Special Commissioners - Cases |
| Case No. 1/58 |
Decided: 25 February, 1958 |
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Employee's uniform allowance deemed taxable; definition of the word "profit" - article 5, now 4, Income Tax Act
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Appellant was entitled to an annual allowance instead of a uniform. He was not obliged to purchase a uniform each year but was allowed to retain the money so long as he paid for such uniform out of pocket when the need for one arose. The Commissioner decided that this allowance constituted "a profit or gain from employment" and was chargeable to tax. The appeal was lodged against this decision.
The Commissioner had based his decision on that of the English Court case Ferguson vs Noble which concerned a detective who was entitled to an allowance for clothes. It was held that "the allowance was simply a contribution towards his expenses, in other words, pecuniary relief given to the man, in other words an addition to his emolument". Moreover the allowance was deemed to have been "paid to the respondent in money and is paid to him as part of the consideration to which he is entitled in return for the services he renders under his contract of employment. Prima facie, therefore, it is part of his assessable income".
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