The High Court rejected Mr Berry's arguments. TUPE requires a change of employer. A share sale does not involve a change of employer. This was not the kind of exceptional case envisaged in Millam v Print Factory (London) 1991 Ltd [2007] where, after a share sale, there had been a de facto TUPE transfer because of the supreme control exercised by the new owner. Here it was business as usual. The operating and service companies carried on in the same way as before the share sale. There was therefore no TUPE transfer, and nothing to object to. ICAP succeeded in its application for an injunction to enforce the garden leave. For TUPE aficionados there is (at paras 24-102) an excellent discussion of some key legal issues in the law on transfer of undertakings, including 'the concept of the employer', the legal requirement of change of employer, and the indicia of a TUPE transfer.
With thanks to Daniel Barnett’s employment law bulletin for providing this update.
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HMRC wins in Rangers Football Club tax avoidance case 7 July 2017
Rangers Football Club has lost its long-running tax avoidance dispute with HMRC.
The Supreme Court has ruled in favour of HMRC in a tax case relating to the remuneration of Rangers Football Club employees through an employee benefit trust.
AccountancyAge has reported on the case which involved a remuneration trust set up by the club (between tax years 2001-02 and 2008-09) under which employees received loans that were not subject to income tax or Class 1 National Insurance contributions.
HMRC argued that the sums paid to the trusts as remuneration should have been subject to tax.
The First-tier Tribunal had previously ruled in 2012 that, although the scheme constituted tax avoidance, as the employees only received a loan of the money paid to the trusts, the scheme avoided liability to income tax and NICs. This judgment was upheld by the Upper Tribunal in 2014.
However, on appeal from HMRC in 2015, the Inner House of the Court of Session decided that “income derived from an employee’s work” was “assessable to income tax, even if the employer agrees that it be redirected to a third party”.
The Supreme Court said that the key question was whether remuneration was taxable as earnings when paid to a third party in cases where the employee “had no prior entitlement to receive it himself”.
In the judgment, the court concluded that “the sums paid to the trustee of the Principal Trust for a footballer constituted the footballer’s emoluments or earnings”.
Andy Wood, technical director of Enterprise Tax Consultants said that the ruling would have a “dramatic” impact on football and the business world.
Speaking about football clubs and other companies that have used employee benefit trusts, he said that:
“The judgment gives HMRC the authority to pursue them for income tax without the need to embark on a further series of legal actions. The process of issuing Follower Notices to recoup payment of what is expected to be tens of millions of pounds in income tax could begin almost immediately.”
Read the full article from AccountancyAge .
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TUPE and pre-packs arrangements 10 July 2017
The European Court of Justice (ECJ) has ruled in a Dutch case on 'pre-pack' administration and TUPE protection for employees.
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