Legal expenses are allowable as a ‘business expense’ (see ¶5800) where they relate to a revenue matter connected with the trade: e.g. allow legal expenses for recovering trade debts but not for recovering a loan to an employee. An expense may not be deductible if it is regarded as attributable to capital (see ¶5805); it may be regarded as not wholly and exclusively laid out for business purposes (see ¶5810); or it may be seen as an application of profits already earned rather than as an expense in calculating those profits.
Want to read more?
This content requires a Croner-i Tax and Accounting subscription.