Phillips (Inspector of Taxes) v Emery

 

Phillips (Inspector of Taxes) v Emery

TAXATION; Income Tax

KING’S BENCH DIVISION

MACNAGHTEN J

6 NOVEMBER 1945

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

Income Tax – Sched E – Weekly wage earner – Housewife directed to work in factory – Travelling expenses – Whether claim for deduction admissible –

Income Tax Act, 1918 (c 40), Sched E, r 9 – Finance Act, 1941 (c 30), s 23.

The respondent, previously engaged in household duties, commenced work on 27 June 1942, at a factory to which she was directed by the Ministry of Labour.

In consequence she incurred travelling expenses between her home and her place of employment amounting to £6 13s 0d, for the period 27 June 1942, to 5

April 1943. The respondent claimed that she was entitled to deduct that sum from her weekly earnings assessed for income tax purposes under the Finance

Act, 1941, s 23, which provided that: “If it is shown in the case of a weekly wage earner assessed to income tax in accordance with r 2 of the rules applicable

to Cases I and II of Sched D that his place of work or his residence has changed through circumstances connected with the present war, and that in

consequence he is obliged to incur and defray out of his wages additional expense in travelling between his residence and his work, the additional expense so

incurred and defrayed by him in the half-year, up to five pounds, shall be deducted from the wages to be assessed for the half-year.” It was contended for the

respondent that the discharge of household duties was “work” within the meaning of sect 23. The General Commissioners on appeal allowed the deduction

sought, and the Crown appealed:—

Held – The relief given under sect 23 was restricted to persons working for reward who must have been engaged, prior to the Ministry of Labour’s direction,

on work which involved travelling expenses. As the respondent had incurred no travelling expenses when discharging her household duties, the deduction

claimed by her was not admissible.

Notes

The ratio decidendi of this case is that by implication the section requires that a claimant shall have earned wages both before and after the change in the place

of work or residence which gives rise to the additional expense, so that since the claimant incurred no travelling expenses before the change, no claim lay. It is

held, alternatively, that even on the view that the section applies to voluntary workers before the change, the claimant had incurred no travelling expenses

before the change and could not, therefore, have incurred any additional expense.

As to Emoluments Derived from Office or Employment, see Halsbury, Hailsham Edn, Vol 17, pp 215, 216, para 436; and for Cases, see Digest, Vol 28,

pp 85–88, Nos 490–507.

Case Stated

Case Stated under the Income Tax Act, 1918, s 149, by the Commissioners for the General Purposes of the Income Tax Acts for the division of Newcastle

borough in the county of Stafford for the opinion of the King’s Bench Division of the High Court of Justice. On 27 October 1943, the respondent, a married

woman, appealed against two assessments made upon her in accordance with the Income Tax Act, 1918, r 2 of the rules applicable to Cases I and II of Sched

D for the two half years ended respectively 5 October 1942, and 5 April 1943. The following facts were found by the Commissioners.

‘The respondent was directed by the Ministry of Labour to work at the Royal Ordnance (B.S.A.) Factory Cross Heath, on May 11, 1942, and she

started to work there on June 27, 1942. Prior to that date she was fully occupied with household duties at 84, Hunters Way, Penkhull, aforesaid, but was

not otherwise employed.

The sum of £6 13s. 0d. represented the expense which the respondent was obliged to incur between June 27, 1942, and Apr. 5, 1943, and defray out

of her wages in travelling between her home at 84, Hunters Way, Penkhull, aforesaid, and her place of work at The Royal Ordnance (B.S.A.) Factory,

Cross Heath.’

On the these findings the Commissioners decided to allow the respondent her claim for travelling expenses.

The Crown appealed.

The Attorney General (Sir Hartley Shawcross KC), and Reginald P Hills for the appellant (Inspector of Taxes).

Henry Wynn-Parry KC and Terence Donovan KC for the respondent.

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6 November 1945. The following judgment was delivered.

MACNAGHTEN J. I think this is a plain case. By the Finance Act, 1941, s 23, it is provided:

‘If it is shown in the case of a weekly wage earner assessed to income tax in accordance with r. 2 of the rules applicable to Cases I and II, of Sched.

D, that his place of work or his residence has changed through circumstances connected with the present war, and that in consequence he is obliged to

incur and defray out of his wages additional expense in travelling between his residence and his work, the additional expense so incurred and defrayed

by him in the half-year, up to five pounds, shall be deducted from the wages to be assessed for the half-year.’

In the case provided for by that section, the additional expense incurred and defrayed by a weekly wage earner is to be treated as an expense necessarily

incurred by him in the performance of the duties of his employment within the meaning of the Income Tax Act, 1918, Sched E, r 9.

The conditions prescribed by the section are quite plain. The taxpayer must be a weekly wage earner. His work must be at one place and his residence at

another. He must have changed either his place of work or his residence through circumstances connected with the present war, and in consequence of that

must be obliged to pay out of his wages additional expense in travelling between his residence and his work.

In the present case the General Commissioners for the borough of Newcastle in Staffordshire have decided that the respondent is entitled to the benefit of

the section. She is the wife of a soldier, but it is said that the travelling expenses which she claimed to deduct were incurred while her husband was still living

with her at home. She was directed by the Ministry of Labour to work at a factory at Cross Heath, and her home was at 84, Hunters Way, Penkhull. Before

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

she was directed to work at the factory at Cross Heath she was occupied in the discharge of her household duties at home. She did no other work. As the case

states, she was fully occupied in her household duties, but was not otherwise employed.

Counsel for the respondent has argued that the respondent, in discharge of her household duties, was doing work, a proposition which no one can doubt,

and, that, therefore, although she earned no wages, she should be regarded as a person who comes within the section. I do not so read the section. It is

dealing, I think, with the case of a person who is doing work for reward. Counsel for the respondent asked why should not a voluntary worker be allowed the

benefit that is given to those who sell their labour? The answer to that is that Parliament has thought fit to restrict the benefit to those who earn wages. The

provision that the relief given by the section is in respect of the “additional” expense incurred by the taxpayer implies that before he changed his residence or

his place of work he must have been engaged in work which involved travelling expenses on his part. The respondent incurred no travelling expenses before

she went to the factory at Cross Heath, so, even if it could be held that the section applied to unpaid workers, she would be debarred from relief.

I, therefore, think that the appeal must be allowed, and the decision of the General Commissioners must be reversed.

Appeal allowed with cost. Case remitted to the Commissioners for determination of the amount of the assessment.

Solicitors: Solicitor of Inland Revenue (for the appellant); Hall, Brydon & Harvey agents for F H Woolliscroft, Hanley.

P J Johnson Esq Barrister.

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[1946] 1 All ER 146