Policy News Journal - 2014-15

The case was remitted to the employment tribunal, which held that a mandatory retirement age of 65 was a proportionate means of achieving the legitimate aims of retention, planning and (with some caveats) collegiality. Whether or not age 65 was proportionate was then appealed to the EAT. The EAT held that the tribunal was entitled to conclude that 65 was an appropriate age, notwithstanding that the point of retirement could have been set at age 66. The employment tribunal had to balance the discriminatory effect of choosing a particular retirement age against its success in achieving the legitimate aims. That balance would not necessarily show that a particular point/age could be identified as any more or any less appropriate than another particular point/age. On the evidence before it, the employment tribunal was entitled to find that a retirement age of 65 was reasonably necessary to achieve the legitimate aims identified.

Termination payments: tax tribunal rules on payments under interim relief orders

15 July 2014

The First Tier Tribunal (Tax) has ruled on the question of whether payments under an interim relief order are taxable in full as earnings under Section 62 ITEPA , or as payments in connection with termination under Section 401?

We are grateful to Daniel Barnett for providing this summary of the case:

The latter, held the First Tier Tribunal (Tax) in Turullols v HMRC. Ms Turullols complained of automatically unfair dismissal for whistle-blowing, and got interim relief pending the hearing of her claim. At the hearing, the employment tribunal found that she was unfairly dismissed, though not because of the whistle-blowing. She settled her claim for compensation, and applied to HMRC for repayment of the tax that had been paid on the salary payments made under the interim relief order. She said they were payments in connection with the termination of her employment and therefore should have been tax-free up to £30,000. HMRC disagreed. On Turullols' appeal, the employment tribunal agreed with Ms Turullols: the payments were only emoluments of her employment if they arose from her employment. They didn't: her employment had been validly and effectively terminated by her dismissal, and it stayed terminated; the effect of the order for interim relief was not to revive her employment, but to continue her entitlement to certain of the benefits she would have received had she remained employed.

HMRC loses Rangers employee benefit trust appeal

18 July 2014

HM Revenue and Customs (HMRC) has lost its appeal in the upper tier tax tribunal in the case around defunct Rangers Football Club plc’s use of an employee benefit trust (EBT).

Employee Benefits have provided this summary of the decision:

In November 2012, the first tier tax tribunal ruled in favour of the Murray Group, which had owned the club before it went into administration and later liquidation.

The group had argued that £49 million in payments it made to staff were not subject to tax because they were loans, not wages. HMRC argued that payments made to players and other employees should be taxable because the EBT was written in employees’ contracts, that it was not discretionary and so formed a taxable part of their contracts.

CIPP Policy News Journal

08/04/2015, Page 111 of 521

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