To be deductible as a business expense (see ¶5800) the expenditure must be wholly and exclusively laid out or expended for the purposes of the business. The word ‘wholly’ refers to the quantum, i.e. how much is referable to business purposes. Thus, if expenditure is not wholly referable to a business purpose, the excess will be disallowed as a deduction. The word ‘exclusively’ means that if the expenditure was partly laid out for business purposes and partly for personal purposes, then the expenditure will be disallowed as a deduction.

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