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Payments made to or on behalf of an employee to enable the employee to maintain a residence in which customers of the employer can be entertained are assessable as part of the employee's income from employment, and on the earlier authorities the employee is not entitled to deduct any part of the expense of maintenance attributable to the entertainment. However, in 1969, Lord Denning said in Westcott v Bryan¹ that the subsection that became ITEPA 2003, s 336 was no longer construed as strictly as it used to be, and that a deduction could be made of an apportioned part of the expense. This case concerned expenses incurred by a company in respect of the occupation by a director of a house that belonged to it and was therefore decided under the provisions of TA 1970, ss 195–203 (now ITEPA 2003, ss 70–72, 114–226). Lord Denning, however, considered three hypothetical cases mentioned by counsel for the Crown, namely:

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   •ÌýÌýÌýÌý where a director was paid a gross salary of £20,000 and was expected to