TaxTMI 
TaxTMI 
1969 (3) TMI 81
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....ith emergency cases. The flying squad duties were very rare. On receipt of a telephone call from the hospital he gives instructions to the hospital staff. He usually sets out immediately by car to the hospital. He may advise treatment by telephone and await a further report. Sometimes the telephone call is received when he is out on his medical rounds. It is found in the stated case that his responsibility for a patient begins as soon as he receives a telephone call. Under the terms and conditions of service of hospital staff the management committee pay to the appellant travelling expenses as a part time officer at a fixed rate per mile, said to be 8d., for single journeys between Fishguard and the hospital, limited to a single journey of 10 miles. The appellant pays the cost of the additional five miles travel himself. The appellant in 1962-63 made about 140 journeys to the hospital and received payment of expenses amounting to GBP 100. This sum was included in his income assessable for that year. In 1963-64 he made about 115 journeys receiving GBP 82 which was also included in his assessment for 1963- 64. Before the commissioners he sought to deduct the whole cost of trave....
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....being raised before your Lordships. In view of the way in which the case went before the commissioners the only point being whether the actual travelling expenses were properly deductible-there is little material in the case on the point. The appellant's entitlement to these expenses is contained in section 19 " Expenses " : " (iv) A part-time officer, when called out in an emergency to the hospital where his principal duties lie, shall receive expenses for such journeys. " The limitation to ten miles for a single journey is contained in section 19(b)(3)(iii) and under the heading : " Travelling Expenses, Mileage Allowances, etc. " : " (iii) Where a part-time officer travels between his private consulting room or place of residence (whichever is the nearer) and the hospital where his principal duties lie before and/or after an official journey, expenses shall be payable for the whole distance provided that for journeys to and from the hospital where the officer's principal ....
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....om the employment. Disregarding entirely contracts for full consideration in money or money's worth and personal presents, in my judgment not every payment made to an employee is necessarily made to him as a profit arising from his employment. Indeed, in my judgment, the authorities show that to be a profit arising from the employment the payment must be made in reference to the services the employee renders by virtue of his office, and it must be something in the nature of a reward for services past, present or future. " Lord Radcliffe, who concurred with Viscount Simonds, said at page 391 : " . . . while it is not sufficient to render a payment assessable that an employee would not have received it unless he had been an employee, it is assessable if it has been paid to him in return for acting as or being an employee . . . .The money was not paid to him as wages. " Later in his judgment Lord Radcliffe appears to treat a claim for indemnity as not assessable. The facts in that case were widely different from the present, but if the proper test is whether the sum is a reward for ....
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....n the present case there is a finding of fact that Dr. Owen's duties commenced at the moment he was first contacted by the hospital authorities. This is further emphasised by the finding that his responsibility for a patient began as soon as he received a telephone call and that he sometimes advised treatment by telephone. It is noteworthy that under section 19(b)(3)(iv) of his terms and conditions of service the hospital is referred to " where his principal duties lie. " There were thus two places where his duty is performed, the hospital and his telephone in his consulting room. If he was performing his duties at both places, then it is difficult to see why, on the journey between the two places, he was not equally performing his duties. Indeed Mr. Heyworth Talbot did not contend to the contrary. It follows that he had to get from his consulting room to the hospital by car to treat the emergency. The travelling expenses were, in my view, necessarily incurred in the performance of the duties of his office. I would allow the appeal. LORD PEARCE.-My Lords, the appellant is a doctor carrying on a general practice at Fishguard, which is 15 miles from Haverfordwest. Since the....
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.... case he would admittedly, if the argument of the Revenue is correct, pay tax on all the reimbursements or partial reimbursements of his railway tickets. Such a situation would be obviously unjust. If it be correct, it is clear that something has gone seriously wrong with the enactments or the case law or with both. It must be disturbing to the citizen if such a situation can arise. Such an injustice is not in the interest of anyone-certainly not of the Revenue, since injustice causes evasion. Each year there is an adjustment of the mechanism of taxation wherever that is necessary to ensure that ingenious schemes of avoidance shall not succeed. There is a corresponding duty to adjust the mechanism where it is found to be creating a clear injustice. On the findings of the commissioners the expenses were incurred in the performance of his duties. In my opinion, that finding was correct and the expenses were allowable under rule 7 of Schedule 9 to the Act of 1952. It was as a doctor practising in Fishguard that the appellant was appointed to his stand-by duties. He was to stand-by in Fishguard. In Fishguard on the telephone he undertook his responsibilities to the patient and th....
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....consolidation, and fresh consideration cannot, I think, have been given to the subject since the short re-enacted section refers only to one express expense and that is the " keeping and maintaining a horse to enable him to perform " the duties. This could not have resulted from a fresh consideration of a section which would be striving to do justice to modern transactions in a modern world. Obviously difficulties are caused by the archaic artificial division between Schedule D and Schedule E, especially if a man is taxed separately under each when both activities are really part of the same profession. There is a further point raised by the appellant in the Court of Appeal. He contends that reimbursements such as that which is here in question do not come within the " emoluments " of an appointment or employment under Schedule E. They therefore never fall to be charged, and it is unnecessary to consider whether they are allowable under rule 7. In my opinion, that contention is correct. " Emoluments " are charged. These are defined as including " all salaries, fees, wages, perquisites and profits whatsoever. " The reimbursements of actual expenses are clearly not intended by ....
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....r the journey there, and back to Fishguard, of GBP 100. For the second of the two years, namely, 1963-64, he likewise received GBP 82 in respect of 115 such journeys : it is only in the taxpayer's contentions that it is alleged that the actual cost of these journeys was GBP 150 for 1962-63 and GBP 123 for 1963-64. Since, however, the case stated finds that under the terms and conditions of service of persons like Dr. Owen travelling expenses are paid at a fixed rate per mile, that they are not payable for a single journey in excess of ten miles, and that Dr. Owen bears the cost himself of the additional five miles between Fishguard and Haverfordwest, it may fairly be assumed that there was no profit element in the travelling allowances he received in these two years, but that, on the contrary they left him out of pocket. Before your Lordships the case proceeded on that footing without demur from the Revenue, and on that basis I proceed to consider the first question. Tax under Schedule E is charged " on the full amount of the emoluments " from the office or employment : and " emoluments " are defined as including " all salaries, fees, wages, perquisites, and profits whats....
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....e distance from his work. Here it is contended for Dr. Owen that he really has two places of employment, one his home at Fishguard and the other the hospital at Haverfordwest : and that the expenses of travelling between the two are deductible accordingly. If the premises are sound the Revenue would concede the conclusion. The contention of two places of employment is rested on these considerations : First, it is found by the general commissioners that Dr. Owen is on stand-by duty at certain specific times, and at these times must be accessible by telephone. Second, that his responsibility for a patient begins as soon as he receives a telephone call, and that on receipt of such a call he gives any necessary preliminary instructions to the hospital staff in relation to the case (which are all emergency cases.) I do not think these facts establish the contention of two places of employment at all. In a very real sense almost every general medical practitioner is on stand-by duty for emergency cases, and is in fact available on the telephone. And almost every such practitioner will, if necessary, give preliminary instructions concerning the patient to anyone who summons hi....
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....ion. The facts must be considered and the rule applied. The appellant is a doctor whose main occupation is as general practitioner in Fishguard. As such he is taxable under Schedule D. In November, 1955, he was offered by the South West Wales Hospital Management Committee, and accepted, an appointment as clinical assistant to the obstetric department at a hospital at Haverfordwest, 15 miles from Fishguard. This appointment has been renewed from year to year, and in the case stated it was found that he was to act as obstetrician and anaesthetist, and that he was on stand-by duty at specified times in respect of each activity during which period he was required to be accessible by telephone. All his work in connection with these appointments was concerned with emergency cases at the hospital. On receipt of a call from the hospital he would give instructions to the hospital staff (e.g., to prepare the patient for an operation). Usually he would then set out immediately to the hospital by car. Sometimes he advised treatment by telephone and then awaited a further report. Not every telephone call resulted in a visit to the hospital. His responsibility for a patient began as soon as h....
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....spital, I cannot appreciate why he was not thereafter travelling on the duty of his office : he was travelling not to his work but on his work. Dr. Owen was not, it seems, in such continuous contact as the well-known Australian flying doctor, but the continuity of his responsibility and function is, I think, established by the commissioners' findings. I can find nothing fictitious or strained in their conclusions. The main argument on which these were resisted was founded on observations in Ricketts v. Colquhoun*, and particularly on a passage in the speech of Lord Blanesburgh. His Lordships, at page 7, used these words : " ' If the holder of an office '-the words, be it observed, are not ' If any holder of an office '- ' is obliged to incur expenses in the performance of the duties of the office '-the duties again are not the duties of his office. In other words, the terms employed are strictly, and, I cannot doubt, purposely, not personal but objective : the deductible expenses do not extend to those which the holder has to incur mainly and, it may be, only....
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....has been unfairly dealt with, inasmuch as his necessary professional expenses of travelling between Fishguard and Haverfordwest have not been allowed as deductions in the assessment of his net income from the exercise of his profession. On the other hand, it seems to me that, when the appellant's position is analysed, the unfairness is attributable to a defect in the system of assessment and not to any misunderstanding or misapplication of the rules or provisions of Schedule E, nor to any error as to the meaning of the word " emoluments. " There is a wrong, but the remedy would have to be found in a change of the system and not in a decision in favour of the appellant on either of the issues in this appeal. The appellant works as a doctor treating patients in two ways (i) as a general practitioner in Fishguard, (ii) as an obstetrician and anaesthetist in part-time employment at the hospital in Haverfordwest. These are two aspects of his professional career, two professional activities. Whether he is working at his consulting room at his home in Fishguard, or on his rounds in and from Fishguard, or at the hospital in Haverfordwest, he is working as a doctor, making use of his....
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....es imposed upon each holder ex necessitate of his office, and to such expenses only . . . . the deductible expenses do not extend to those which the holder has to incur mainly and, it may be, only because of circumstances in relation to his office which are personal to himself or are the result of his own volition. . . . The travelling expenses of the appellant from London to Portsmouth and back are, in my judgment, excluded from the benefit of the rule, both by the application of the test I have indicated as relevant and also for another reason quite separate. The expenses covered by the words ' the expenses of travelling in the performance of the duties of the office, ' are, I think, limited to those which the Master of the Rolls has well termed ' itinerant expenses. ' There are none such here. . . . That the appellant travelled from London to hold his court at Portsmouth and returned to London at the close of the sessions was, in my judgment, a course prescribed for him by his own convenience as a practising London barrister and by nothing else. " Counsel for the appellant sought to distinguish the present case from Ricketts v. Colquhoun * on the ground tha....