Newsom v Robertson (Inspector of Taxes)

[1952] 2 All ER 728
[1953] Ch 7

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(Judgment by: Denning LJJ)

Newsom
vRobertson (Inspector of Taxes)

Court:

Judges: Somervell LJJ
Denning LJJ
Romer LJJ

Legislative References:
-

Case References:
Ltd v Inland Revenue Comrs - [1948] 2 AllER 367
Bentleys, Stokes & Lowless v Beeson - [1952] 2 AllER 82
Smith's Potato Crisps (1929) Ltd v Inland Revenue Comrs - [1948] 2 AllER 367

Hearing date: 24, 30 July 1952
Judgment date: 13 October 1952

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Judgment by:
Denning LJJ

In the days when income tax was introduced, nearly 150 years ago, most people lived and worked in the same place. The tradesman lived over the shop, the doctor over the surgery, and the barrister over his chambers, or, at any rate, close enough to walk to them or ride on his horse to them. There were no travelling expenses of getting to the place of work. Later, as means of transport quickened, those who could afford it began to live at a distance from their work and to travel each day by railway into and out of London. So long as people had a choice in the matter--whether to live over their work or not--those who chose to live out of London did so for the purposes of their home life because they preferred living in the country to living in London. The cost of travelling to and fro was then obviously not incurred for the purpose of their trade or profession. Nowadays many people have only a very limited choice as to where they shall live. Business men and professional men cannot live over their work, even if they would like to do so. A few may do so, but once those few have occupied the limited accommodation available in Central London, there is no room for the thousands that are left. They must live outside, at distances varying from three miles to fifty miles from London. They have to live where they can find a house. Once they have found it, they must stay there and go to and from it to their work. They simply cannot go and live over their work.

What is the position of people so placed? Are their travelling expenses incurred wholly and exclusively for the purposes of the trade, profession, or occupation? I think not. A distinction must be drawn between living expenses and business expenses. In order to decide into which category to put the cost of travelling, you must look to see what is the base from which the trade, profession, or occupation is carried on. In the case of a tradesman, the base of his trading operation is his shop. In the case of a barrister, it is his chambers. Once he gets to his chambers, the cost of travelling to the various courts is incurred wholly and exclusively for the purposes of his profession. But it is different with the cost of travelling from his home to his chambers and back. That is incurred because he lives at a distance from his base. It is incurred for the purposes of his living there and not for the purposes of his profession, or at any rate not wholly or exclusively, and this is so whether he has a choice in the matter or not. It is a living expense as distinct from a business expense.

On this reasoning I have no doubt that the commissioners were right in regard to Mr Newsom's travelling expenses during term time. The only ground on which counsel for the taxpayer challenged their finding during term time was because Mr Newsom had a study at his home at Whipsnade completely equipped with law books and did a lot of work there. The commissioners did not regard this as sufficient to make his home during term time a base from which he carried on his profession, and I agree with them. His base was his chambers in Lincoln's Inn. His home was no more a base of operations than was the train by which he travelled to and fro. He worked at home just as he might work in the train, but it was not his base.

The commissioners found, however, that during the vacation his professional base was not at his clambers in Lincoln's Inn, but at his home at Whipsnade. I do not think this was a correct inference from the facts before them. His professional base was throughout in Lincoln's Inn, and it did not cease to be so simply because he rarely went there during the vacation. For these reasons I agree that the appeal should be dismissed.