- (1.) The following judgment were handed down. Slade, L.J. - This is an appeal by a firm now as Arthur Young and formerly knowns as Arthur Young McClelland Moores & Co.,from the order of Vinelott J. made on October 30, 1986. He had before him an appeal from the special Commissioner by way of case stated under Sec. 56 of the Taxes Management Act 1970. The appeal related to an assessment to Income Tax made against the firm under Schedule D for the year 1981 -82. for this purpose the assessable profit of the firm fell to be calculated by reference to the accounting period 1 May 1979 to 30 April 1980. Briefly, the question at issue was and is whether two sums expended by the firm as contribution to the expenses incurred by two of the partners in moving house at the request of the firm are deductible in ascertaining those profit.
(2.) The firm is large and well -known firm of chartered accountants. As at 30 April 1980 it had 95 partners and about 1,400 employees, of whom about half were professionally qualified, it had 15 officer in various parts of England and Scotland. A new office was opened in Southampton is September 1981. By the time of the period with which we are concerned a partners meeting had become a practical impossibility and an executive committee took most of the administrative decision needed for the smooth èrunning of the firm. This committee consisted of an elected chairman, six elected members and one appointed member, the partner and employees were requested to move from one part of the country to another in order to work in a different of the firm, to ensure that the staff were deployed to the firms best advantage, the commissioner decision recorded : The practice of moving partner and employee commenced in about the year 1975, within a short period of time it became the accepted policy of the firm that any partner or the employee might be requested to move for the benefit of the firms business. Employees of the firm who were taken into partnership were made aware of the policy at the time of their admission to partnership. Partners of the firm immediately aware of all the details of the policy on becoming partners in the firm. The policy was not a term of the partnership agreement, in an effort to make this policy palatable and acceptable to all members of the firm, the executive committee decided that the firm would make a substantial contribution to the cost of the private removal expenses of each person who was asked to move.
(3.) The contribution was made up of three elements. These elements are set out in the decision but their details do not matter, it is not suggested that the amounts of the contribution were too generous or exceeded the expenses actually incurred by the recipients. The firms policy of requesting partners and employees to move and contributing to their removal costs (the firms removal policy) applied equally to partners and employees of whatever grade or seniority. The commissioners found as fact : All partners of the firm approved and agreed with the firms removal policy. A partner would not be compelled to move if he request after being requested to do so, but a partner who declined to move be held in less esteem by his colleagues. We were told and we accept that this financial prospect might suffer and he would be looked upon as someone who did not have the best interest of the firm at heart, occasionally partners would refuse to move could not be compelled to do so and, unlike partners, their position is the firm would not be affected prejudicially should they refuse, on the other hand we heard no evidence concerning any instance of a refusal to move by an employee and the acceptance of such a move by an employee was likely to enhance his prospect of promotion within the firm might lead to promotion on the occasion to move. ;