Was there duality of purpose?

The taxpayer was a professional actor taking part in a musical in London. He deducted expenses relating to accommodation including the cost of a tenancy in his income tax self assessment.

HMRC refused the claim under ITTOIA 2005 s 34(1)(a). The First-tier Tribunal (FTT) allowed the taxpayer’s appeal on the ground he was not looking for a permanent home in the capital. 

The Revenue appealed saying the tribunal had erred in law in failing to consider whether or not the taxpayer had a dual purpose in incurring the expenditure: the accommodation met his ordinary needs for warmth and shelter as well as being near the theatre where he was working.

The Upper Tribunal said the FTT had failed to apply the ‘wholly and exclusively’ test properly. It had focused entirely on the issue as to whether or not in taking on the tenancy ...