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The general rule is that a deduction from earnings is allowable if¹:

1. Ìý

   •ÌýÌýÌýÌý the employee is obliged to incur and pay it as holder of the employment, and

2. Ìý

   •ÌýÌýÌýÌý the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment

In addition to this general rule there are provisions allowing or preventing specific expenses². These are described separately in the articles below.

The rules relating to travel expenses (see E4.714–E4.723A) have a separate treatment in the legislation, and an amount that may be deducted under the travel rules may not be deducted under the general rule³.

This statutory formula has a long history and, as interpreted by the courts, has proved notoriously restrictive; particularly the phrases 'wholly, exclusively and necessarily' and 'in the performance of the duties'. Unsurprisingly then, these phrases have survived both a rewording with effect from 1998/99 to fit in with the Tax Law Rewrite Project and the subsequent rewrite as ITEPA 2003. Neither exercise changed the interpretation