Barry v Hughes (Inspector of Taxes)

[1973] 1 All ER 537

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Between: Barry
And: Hughes (Inspector of Taxes)

Court:

Judge: Pennycuick V-C

Subject References:
Income tax
Relief
Children
Child over the age of 16 receiving full-time instruction
Instruction at any university, college, school or other educational establishement
Other educational establishment
Meaning of education
Training of mind in contradistinction to training in manual skills
Taxpayer's son attending a training unit for the mentally subnormal
Training predominantly in factory work
Academic training every day or every alternate day
Whether unit educational establishment

Legislative References:
Income and Corporation Taxes Act 1970 - s 10(2)

Case References:
Heaslip v Hasemer - (1927) 13 Tax Cas 212; 138 LT 207; 28(1) Digest (Reissue) 448, 1602

Judgment date: 1 December 1972

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The taxpayer claimed child relief in respect of his son who was over the age of 16 at the commencement of the year of assessment. The son was attending on a full-time basis at an intensive training unit ('the unit') for the mentally subnormal between the ages of 15 to 30. The unit, which formed part of a hospital management group, provided training mainly in factory work. Apart from an hour's teaching in history, geography and mathematics, daily or on alternate days, the unit provided no other academic training. On the evidence the commissioners came to the conclusion that the unit was not an educational establishment within the meaning of s 10(2) ^[F1] of the Income and Corporation Taxes Act 1970 and disallowed the taxpayer's claim. On appeal by the taxpayer.

Held - The question the court had to decide was whether the unit was some kind of educational establishment other than a university, college or school. An educational establishment was one whose primary function was that of education, which, in the context of s 10(2) of the 1970 Act, denoted training of the mind in contradistinction to training in manual skills. As by far the greater part of the activities of the unit was devoted to training in manual skills and only a very small proportion of the time was addressed to the training of the mind in a direct sense, it was reasonable for the commissioners to conclude that the unit was not an educational establishment. Accordingly the taxpayer's appeal would be dismissed (see p 543 f h and j and p 544 b and c, post).

Notes

For relief in respect of children over the age of 16 receiving full-time education, see 20 Halsbury's Laws (3rd Edn) 441, 442, para 824, and for a case on the subject, see 28(1) Digest (Reissue) 448, 1602.

For the Income and Corporation Taxes Act 1970, s 10, see 33 Halsbury's Statutes (3rd Edn) 43.

At a meeting of the Commissioners for the General Purposes of Income Tax for the Division of West Brixton held on 10 December 1970, Leonard Thomas Barry ('the taxpayer') claimed that he was entitled to child relief in respect of his son, Michael, who was over the age of 16 at the commencement of the year of assessment 1969-70. At the relevant time the son attended as a day patient at the Sherwood Intensive Training Unit run by the Manor Hospital Management Committee. The commissioners dismissed the claim on the ground that the unit was not a recognised educational establishment, college, university or school and that the education was not full-time. Following a formal declaration of dissatisfaction by the taxpayer, they stated a case. On 2 December 1971 the appeal on that case stated came before Megarry J who remitted the case to the General Commissioners. The commissioners reheard the appeal and again dismissed the taxpayer's claim on the ground that the intensive training unit was not a 'university, college, school or other educational establishment'. The taxpayer declared his dissatisfaction with that decision and required them to state a supplemental case. The original and the supplemental cases are set out in the judgment.