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Newspapers not allowable for tax

Do you have a link to HMRC manual?

Didn't find your answer?

Can you please help me to hunt down more details about newspapers being disallowable for tax, so I can send the data to disbelieving client.

Replies (22)

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By accountaholic
13th Apr 2021 13:23

Is it disallowable?

If you run a hotel or restaurant and provide them for customers surely that would be ok, or if you provide them for staff to increase their knowledge.

It must depend on the context as it would seem to be allowable in at least some circumstances.

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Replying to accountaholic:
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By Dib
13th Apr 2021 13:31

Agreed regarding context - perhaps Moonbeam's client is an employed journalist...

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By SteveHa
13th Apr 2021 13:31

S366 is your friend, and you should read it.

However, just as a side, but related interest, you may want to look at Fitzpatrick and Others v Commissioners of Inland Revenue; Smith (HM Inspector of Taxes) v Shuttleworth and Others - 66 TC 407

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Replying to SteveHa:
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By Dib
13th Apr 2021 13:36

You have added flesh to the bones. Thank you, I couldn't recall the case!

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Replying to Dib:
By Moonbeam
13th Apr 2021 14:09

Thanks, but s366 of what act? I can't google this.

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Replying to Moonbeam:
By SteveHa
13th Apr 2021 14:52

Typo - meant to be 336. ITEPA

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Replying to SteveHa:
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By accountaholic
13th Apr 2021 18:34

Thanks for the references Steve, I've read them and other points raised in the manuals, very tricky to get correct every time. As paper newspapers seem to be disappearing faster than spring snow maybe it won't be an issue for much longer - although what about subscription for online newspapers, one for another day!

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Replying to SteveHa:
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By Tax Dragon
14th Apr 2021 07:36

SteveHa wrote:

..you may want to look at Fitzpatrick and Others v Commissioners of Inland Revenue; Smith (HM Inspector of Taxes) v Shuttleworth and Others - 66 TC 407

Lord Templeman wrote:

If deductions of this kind were allowed in one case every journalist or other similar employee would claim to be entitled to deduct the payment made by him for every newspaper and periodical which he chose to purchase …and there would be no end to it.

What a woeful argument. If the law allows a deduction, a taxpayer should be... no, is, entitled to it. Having said that, there's something prophetic about the remark, as (it seems to me - sadly to a large degree from comments* in this forum - that) accountants* don't understand the law and allow claims and deductions that, honestly, they should not.

Lord Templeman wrote:

A journalist who reads newspapers does so in order to be able to perform his duties to the highest possible standard but he does not read "in the performance of his duties".

Bang on, your lordship. "In the performance of his duties." Having thrown in an entirely spurious argument, Lord Templeman follows up with the exact right one. The words come, of course, from s336 (not relevant to the OP's case). They meant that the law did not allow a deduction, the taxpayer was not entitled to it.

And it's the law, not the judgment (and, thankfully, not the spurious argument therein - even though HMRC seems to quote it with approval in EIM31652) that would be relevant to, eg, a digital subscription (of any kind). Or indeed any cost - though of course, for some, such as travel, there is targeted law.

(S336 is employee tax, not relevant to the OP. Though Steve could not have known that, given the lack of any information provided at the time.)

*Edited to add 'some'. I thought that implicit, but when I reread I realised I needed to make it express.

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Replying to Tax Dragon:
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By The Dullard
14th Apr 2021 09:26

In my opinion, Mallalieu lost her case at the HoL because it would have been opening the floodgates, rather than this ridiculous subconscious motive test that we've been left with. They could have at least said it out loud.

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By Hugo Fair
13th Apr 2021 15:32

"details about newspapers being disallowable for tax" ... but you don't say which Tax.

Are you referring, as others have assumed, to the allowability of an employee's expense repayment being treated as "a deduction from earnings"? Or to one of the other many scenarios and/or taxes that may be involved?

Basically, who is providing the newspapers to whom (an individual, a group or a function)? What newspapers and what is the purpose of the provision? And so on!

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Replying to Hugo Fair:
By Moonbeam
13th Apr 2021 18:42

Sorry I've committed the cardinal sin of expecting you to read my mind. Self employed marketing person. Says papers required for business purposes.

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Replying to Moonbeam:
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By Hugo Fair
13th Apr 2021 19:15

Ah, well I guess it depends on which papers/magazines!
Specialist 'niche' ones that only cover, say, grain farming - and IF directly relevant to the sector in which client offers marketing services - might be arguable if only on basis that no sane person would read them for anything other business purposes.
If more generalist (magazines or indeed marketing services) then, sadly, probably there are some people who gain at least some personal pleasure from reading them ... so not allowable.

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RLI
By lionofludesch
13th Apr 2021 18:08

Bit more detail needed, Moonbeam.

Employed or self-employed ?

What trade ? Newspapers for a barber's shop would be grand, for example.

I've certainly claimed for them on behalf of clients so it's certainly not a blanket ban.

You might struggle to find the wording you want. It's more of a judgement call than you imply.

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Replying to lionofludesch:
By Moonbeam
13th Apr 2021 18:41

Sorry to not give enough info. This is a self employed marketing person. He says he needs various broadsheet papers for business purposes and can justify.
But I can't see how he can say they are wholly for business.

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Replying to Moonbeam:
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By lionofludesch
13th Apr 2021 19:35

Well, I manage to fill my day without reading newspapers. I think it's dangerous to disallow the cost of a newspaper just because there's a bit of non-business stuff in it. He might not read it.

Listen to his argument, be critical but at the end of the day, it's his return, not yours.

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By frankfx
13th Apr 2021 22:31

Duality of purpose

This case may help.

https://www.rpc.co.uk/perspectives/tax-take/osborne-tribunal-takes-a-div...

Also to demonstrate to client HMRC attitude and willingness to go to tribunal

I seem to recall that if the papers and periodicals are subscribed for, rather than a weekly or monthly ad hoc purchase. That would help.

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Hallerud at Easter
By DJKL
13th Apr 2021 22:48

You now all have me concerned, we normally would buy two a day for our office reception, The Scotsman and The Times. We have enjoyed a decent saving the last 12 months but as we expect to go back on the 26th I would consider starting again, albeit not that many visitors expected for the next few months though I am already starting to slightly fill my diary, a JV meeting is currently being scheduled late April/Early May.

Perhaps visitors ought to bring their own coffee etc?

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Replying to DJKL:
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By Tax Dragon
13th Apr 2021 23:05

There's, conceptually, a difference between coffee for staff, coffee for clients/ visitors and coffee consumed by a sole trader/proprietor. Conceptual differences often make themselves felt in terms of which tax(ing) provision you need to apply; sometimes different provisions may give differing outcomes.

The joy of tax.

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By I'msorryIhaven'taclue
14th Apr 2021 10:03

So far as Moonbeam's self-employed marketing person's circumstances apply, it's interesting that Hugo and Lion appear to have reached opposite conclusions.

Is this going to boil down to the individual facts of the case? Such as what precise purpose(s) the papers fulfill, for example: obtaining leads; researching his competitors' adverts; or simply for general business information. (Always assuming of course that he doesn't do the crossword or read the sports pages.)

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Replying to I'msorryIhaven'taclue:
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By lionofludesch
14th Apr 2021 10:14

I'msorryIhaven'taclue wrote:

So far as Moonbeam's self-employed marketing person's circumstances apply, it's interesting that Hugo and Lion appear to have reached opposite conclusions.

I haven't reached a conclusion.

There's not enough information.

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Replying to lionofludesch:
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By Hugo Fair
14th Apr 2021 11:41

Ditto (regarding not reaching a conclusion). I was merely trying to point out the need to interpret 'wholly and exclusively' - and that in this case it might be hard to do so. FWIW, by definition 'wholly and exclusively' cannot be partly applied ... so in my opinion it's going to be an uphill struggle to show it applies to the purchase of a newspaper.
Additionally, see the point below by Dullard about needing to "examine the taxpayer's mind at the time of incurring the expense."

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Replying to I'msorryIhaven'taclue:
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By The Dullard
14th Apr 2021 10:18

Mallalieu has the answer.

The expenditure needs to have been incurred wholly and exclusively for business purposes.

To determine that, we have to examine the taxpayer's mind at the time of incurring the expense.

If all the purposes in the taxpayer's mind at that time were business ones (even if some private benefit were subsequently obtained), then it is incurred wholly and exclusively for business purposes, and so allowable.

If the taxpayer has present in their mind a purpose (including, according to the HoL, a subconscious one) that is not a business purpose, then it is not allowable.

Mallalieu lost on the having a purpose in her mind of which she was completely unaware, but (according to the HoL) it had to be there, because, apparently, even if she hadn't been incurring the expenditure to satisfy the requirements of the bar, she would otherwise have ended up attending the courts naked.

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