The Court also pointed out that length of service is not automatically relevant. The important question is whether the length of service, and the manner in which the service was rendered during that period, yields inferences that indicate that the employee is likely to return to work as soon as she can.
First Tier Tribunal Judges loans to be income from employment
9 December 2013
Recent findings in a First Tier Tribunal when coupled with last week’s Autumn Statement confirm the ongoing message that compliance measures and a clamp down on tax avoidance measures are very much a focus for HMRC. The scheme had been marketed to independent contractors as a remuneration package which would save them substantial amounts of income tax and national insurance contributions. The First-tier Tribunal dismissed all the arguments put forward during the appeal against HM Revenue and Customs’ (HMRC’s) assessments by the contractor Philip Boyle. The judge found that the loans were “ in substance and reality income from his employment, bearing in mind in particular that Mr Boyle had no need for a loan, there was an entirely artificial exchange rate; the reality is that there was no borrowing by Mr Boyle and he never believed that the ‘loans’ were other than a means of receiving his income without suffering tax on that income ”. The judge also decided that the loans were not genuine: “ No evidence has been provided at any stage during HMRC's lengthy investigation of the scheme, despite many requests for such evidence, to show that the foreign currency ever existed. ”
David Gauke, Exchequer Secretary to the Treasury, said:
“I am delighted the tax tribunal threw out this contrived scheme, designed to avoid tax.
“The unprecedented package of counter-avoidance measures announced in the Autumn Statement, combined with HMRC’s record of winning over 80 per cent of all avoidance cases taken to court, shows the writing is on the wall for the minority who are prepared to use marketed tax avoidance schemes to get around the rules.”
It has been calculated that this ruling against an income tax avoidance scheme is expected to protect up to £400 million in tax that would otherwise not have been paid.
It has been reported that approximately 15,000 people used schemes similar to that used in this case, where contractors receive “loans” as a form of payment. Of the 348 users of this scheme, 226 have settled with HMRC and paid approximately £5 million. HMRC is continuing to pursue others.
CJEU ruling: Holiday pay must include commission
13 December 2013
Should commission be taken into account when calculating holiday pay?
Yes, according to the opinion of Advocate-General Bot in the CJEU (Court of Justice of the European Union) in ZJR Lock v British Gas .
Daniel Barnett’s Employment Law Bulletin summarises the case:
CIPP Policy News Journal
16/04/2014, Page 128 of 519
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