Communication problems

The appellant was a borough councillor who had been elected for the year in question to the London borough of Brent. He was not new to the job and provided the tribunal with evidence of over 20 years’ experience.

As part of his role the appellant received a basic allowance that was intended to cover incidental costs. The relevant legislation ITEPA 2003 s 336 discloses that a local government councillor is entitled to a tax deduction for amounts which he is ‘obliged to incur and pay as holder of the office’ and which he has incurred ‘wholly exclusively and necessarily’ in the performance of his official duties.

In the past HMRC had allowed one-sixth of the appellant’s home expenses but for 2002/03 the department reduced the amount to £135 this being the...