Social Security Commissioner's Decisions

Abstract

R(FC)1/91 C, who was in partnership with her husband, a self-employed area sales manager, claimed family credit from April 1989. Trading and profit and loss accounts for the year ending March 31, 1989, were provided, together with a balance sheet of the partnership as at the date. In refusing to allow the deduction of certain expenses for the purpose of family credit, the Adjudication Officer (A.O.) added back to the profits amounts representing depreciation, bad debts, business lunches, motor expenses for private use, and private use of the telephone. This effectively doubled the amount of profit to be taken into account in assessing entitlement. A re-assessment was carried out subsequently in the light of C's statement that in the year in question two weeks holiday had been taken. That resulted in the profit being assessed over 50 weeks, thereby reducing still further the amount of family credit entitlement. Cash drawings from the partnership exceeded the profits accepted by the Inland Revenue. It was common ground that no allowable deduction could be made for depreciation (regulation 22 of the Family Credit (General) Regulations 1987).