Taxation

In MacKinley v Arthur Young McClelland Moores Co [1989] 62TC704 payments made by a partnership towards the removal expenses of partners were held to have an inevitable private purpose , despite the advantages to the partnership of the partner 's change of residence

Arthur Young McClelland Moores Co , was a firm of chartered accountants comprising a group of individuals who carried on a profession in partnership together

The firm had grown over the years . At the beginning of the relevant accounting period (from 1 May 1979 to 30 April 1980 ) the firm had

88 partners at the end of the period it had 95 partners at the time of the court proceedings had over 200 partners . As the firm grew in size and acquired offices throughout Great Britain it became necessary to ask partners and employees to move from one part of the country to another to ensure that the staff was deployed to the firm 's best advantage . The Commissioners ' decision records that `it became the accepted policy of the firm that any partner or employee might be requested to move for the benefit of the firm 's business

To make this policy or practice more acceptable the executive committee decided that the firm should contribute to the expenses of a partner or employee who was asked to move . They decided that the contribution by the firm should be a sum equal to any estate agent 's charges , surveyor 's fees , legal costs and disbursements and furniture removal charges actually incurred , reasonable expenses for travel and subsistence to a maximum of three months whilst the partner or employee was looking for a new house and during the relocation period , and a disturbance allowance of ?1 ,000 in the case of a partner and ?700 in the case of an employee to meet the cost of , for example , re-laying carpets and refitting curtains

There was evidence accepted by the Commissioners that if the firm had not agreed to make this contribution some partners and employees might have refused to move . The policy was to make a contribution to the cost of the move only if the move was made at the request of the firm if a partner or employee asked to move to another office no contribution was made

During the accounting period in question the firm paid two partners (R J Wilson , and J A Cooper ) contributions to the expenses of moving home The Special Commissioners found that the expenditure was incurred wholly and exclusively for the purposes of the firm 's business . In reaching this conclusion it is evident that the Commissioners were paying regard to two and only two considerations , that is to say : the conscious motives of Wilson and Cooper in agreeing to move , and the motives of the partners (as represented by the executive committee ) in requesting them to do so and agreeing to contribute to the cost in accordance with the established policy

Vinelott J thought that in coming to this conclusion the Commissioners...