Hamerton v Overy (HM Inspector of Taxes)
| Jurisdiction | England & Wales |
| Judgment Date | 17 February 1954 |
| Date | 17 February 1954 |
| Court | Chancery Division |
HIGH COURT OF JUSTICE (CHANCERY DIVISION)-
Income Tax, Schedule E - Deductions - Expenses - Initial and Annual Allowances - Income Tax Act, 1918 (8 & 9 Geo. V, c. 40), Schedule E, Rule 9 - Finance Act, 1949 (12 & 13 Geo. VI, c. 47), Sixth Schedule, Part II, paragraphs 2 and 4.
A consultant anaesthetist employed by a Regional Hospital Board appealed against assessments to Income Tax under Schedule E in respect of his remuneration, claiming that deductions should be allowed under Rule 9, Schedule E, Income Tax Act, 1918, in respect of (1) the cost of maintaining a telephone in his home, (2) a proportion of the wages and keep of a maid who took messages during his absence, (3) his subscription to the Medical Defence Union and (4) car-running expenses in excess of the car allowance paid to him by the Hospital Board. He also claimed initial and annual allowances in respect of the car.
The General Commissioners dismissed the appeal and the Appellant demanded a Case.
Held, that the Appellant was not entitled to initial or annual allowances in respect of the car and that, following the decision in Lomax v. Newton, 34 T.C. 558, no deduction could be allowed for the expenses claimed.
Stated under the Income Tax Act, 1952, Section 64, by the Commissioners for the General Purposes of the Income Tax acting in and for the Division of St. Augustine's West in the County of Kent for the opinion of the High Court of Justice.
1. At a meeting of the said Commissioners held on 20th June, 1952, for the purpose of hearing appeals, Dr. James R. Hamerton (hereinafter called "the Appellant") appealed against assessments under Schedule E of the Income Tax Act, 1918, in respect of emoluments from his employment as a consultant anaesthetist employed by the South Eastern Metropolitan Regional Hospital Board (hereinafter called "the Board"). The assessments were for the years 1949-50 and 1950-51, and were in the sums of £1,149 and £2,750 respectively. The grounds of the appeals were that for 1949-50 the Appellant claimed to be entitled under Part II of the Income Tax Act, 1945, to an initial allowance in respect of the purchase in February, 1950, of a motor car for the sum of £1,864 and for both years the Appellant claimed to be entitled under Rule 9 of Schedule E to an allowance for travelling and other expenses and under Rule 6 of Cases I and II of Schedule D to an annual allowance for wear and tear of his motor car.
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(i) The Appellant appeared before us, giving the following information which we accepted:-
(a) that he was employed by the Board under contract (which was not before us) at an annual salary of £2,750 as a full time consultant anaesthetist to the Canterbury and Isle of Thanet groups of hospitals. His principal duties lay at the Margate Hospital but he also had to attend hospitals at Canterbury, Whitstable, Herne Bay and Ramsgate;
(b) that he was required to make regular and emergency visits to hospitals in the groups and to undertake domiciliary consultations in the areas and that he necessarily travelled on the Board's business in his own motor car. The South Eastern Metropolitan Hospital Board had certified that the possession of a car was essential to the satisfactory performance of the Appellant's duties;
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(c) that he was a "regular car user" as defined by the terms of his contract of service and as such received from the Board in respect of his user of his car an allowance of £52 yearly plus 31/2d. for each mile travelled in the Board's service. The mileage allowance of 31/2d. was not given for journeys,
(i) between his residence at Herne Bay and his main hospital at Margate, or
(ii) when travel by public transport would be appropriate;
(d) that a telephone in his home was essential for the purposes of his employment but that the Board had declined to pay the cost of it;
(e) that the presence in his home of a maid to take telephone messages during the Appellant's absence was essential;
(f) that it was a condition of his contract with the Board that during the period of his appointment he should be a member of a Medical Defence Union or Society approved by the Board but that the Board declined to pay the cost of the subscriptions.
(ii) The Respondent gave us the following information which we accepted:-
The contract between the Appellant and the Board contained a general provision...
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