Self-employed people are only permitted to deduct from their Income Tax bills those expenses that are incurred ‘wholly and exclusively’ for the purposes of their trade or occupation. That is a very demanding test but, in a guideline case, it was passed by a saturation diver who spent heavily on maintaining his physical fitness.
The diver appealed to the First-tier Tribunal (FTT) after HM Revenue and Customs (HMRC) disallowed his claim for an Income Tax deduction in respect of expenses involved in pursuing a rigorous exercise regime. HMRC contended that, whilst his work required him to keep fit, the costs of doing so served a dual purpose in that they provided a personal benefit to him as a living human being.
Ruling on the matter, the FTT noted that the diver’s job, which involved working at depths of up to 150 metres, required him to live in a pressurised environment for days or weeks on end. Saturation diving is a dangerous occupation and a lack of fitness can have fatal results. Those who used his services enforced minimum standards of fitness and, if he failed to attain them, he could not work.
In upholding his appeal, the FTT found that his sole motive and purpose in engaging in a physical regime, which was by any measure extreme, for two to three hours daily was to maintain the level of lung, heart and muscular fitness required by his occupation. The physical necessities of saturation diving dictated his training methods, their duration and location.
His regime was far removed from his personal physical needs and it could not be reasonably inferred that he undertook such a high level of training because of a subconscious motive of keeping fit as a human being. Any improvement in his fitness was incidental and his regime entailed bodily stress to which he would not otherwise subject himself. The FTT concluded that there was no duality of purpose in his expenditure on fitness training and that such expenditure was thus tax deductible.
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