Osborne v Revenue & Customs (INCOME TAX : deductibility of fitness training) [2020] UKFTT 373 (TC) (25 September 2020)

Osborne v Revenue & Customs (INCOME TAX : deductibility of fitness training) [2020] UKFTT 373 (TC) (25 September 2020)

The Tribunal found that Mr Osborne’s fitness training was dictated by the physical necessities of his occupation as a saturation diver, with the sole purpose of enabling him to meet the extreme fitness requirements and pass mandatory tests. The training was not undertaken for personal benefit, and any incidental personal advantage was unavoidable and did not create duality of purpose. Therefore, the expenditure was incurred wholly and exclusively for the purposes of the trade and is deductible under section 34.

Citation
[2020] UKFTT 373
Parties
Appellant: Robert John Osborne; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
25 September 2020
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal allowed
Legal Topics
Income Tax, Deductibility of Expenses, Fitness Training Expenditure, Section 34 ITTOIA 2005, Duality of Purpose
Tax Law Income Tax Deductibility of Expenses Fitness Training Expenditure Section 34 ITTOIA 2005 Duality of Purpose

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Parties

Robert John Osborne

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax Chamber) Substantive Decision

Legal Issues

  1. 1 Whether fitness training expenditure incurred by a saturation diver is deductible under section 34 Income Tax (Trading and Other Income) Act 2005, or disallowed due to duality of purpose.

Ratio Decidendi

The Tribunal found that Mr Osborne’s fitness training was dictated by the physical necessities of his occupation as a saturation diver, with the sole purpose of enabling him to meet the extreme fitness requirements and pass mandatory tests. The training was not undertaken for personal benefit, and any incidental personal advantage was unavoidable and did not create duality of purpose. Therefore, the expenditure was incurred wholly and exclusively for the purposes of the trade and is deductible under section 34.

Court Disposition

Appeal allowed

Orders

  • HMRC must recalculate the 2016/17 assessment and penalty to reflect the deductibility of the fitness expenditure.