While Mr Forsyth was employed by the organisation, the claimant was a member of its healthcare scheme. Although this membership ceased upon his retirement, he discovered others in his position were still able to enjoy the scheme benefits. The claimant contacted Nestle and it was agreed he could continue to have access to the healthcare scheme for himself and his family but was required to make a contribution.
Nestle later subsequently offered him and his wife a one-off payment of £29,783 through a compromise agreement to leave the scheme, which he accepted.
The organisation made the payment, after deduction of income tax but the retired employee completed his tax return on the basis that the compensation payment was a capital gain, split 50% between himself and his wife. HM Revenue and Customs (HMRC) contended the payment was to Forsyth alone and was subject to income tax. The former employee disputed the claim, on the grounds that if it was received by him alone, then the payment was subject to the termination payment £30,000 tax exemption provided. The First Tier Tribunal upheld the decision in Forsyth v HMRC that the payment was taxable under the employer-financed retirement benefit provisions as a lump sum, rather than within the termination payment provisions. Tina Riches, national tax partner at Smith and Williamson, said: “The payment was a benefit from a scheme for the provision of benefits which is not a registered pension scheme and from which a lump sum, gratuity or other benefit is received, so was taxable. The tribunal also found that it was not a termination payment and so did not benefit from the £30,000 tax exemption. Employers should take care to assess the pay-as-you-earn (PAYE) implications of lump sum payments to former employees in the light of this case.” CIPP comment The question of whether a payment on leaving is taxable in full or qualifies for the £30,000 exemption is a complex one. Readers are reminded of the CIPP training course on Termination Payments which covers this and other useful topics.
Tribunal finds employee disabled when evidence indicates otherwise
18 November 2014
The case of Department for Work and Pensions v Conyers shows how unpredictable disability discrimination cases can be, and at the same time provides some useful guidance for employers in relation to these cases.
We are grateful to the Chartered Institute of Personnel and Development (CIPD) for their report on this case, which rested on whether the employee in question was disabled.
The report shows that the tribunal found that the claimant in this case was disabled when:
the joint expert report said she was not the witness statement said the employee thought she was not the evidence from the employee on the day indicated she was not disabled. However the Employment Appeals Tribunal reversed that decision, relying on those notes of the tribunal hearing which could be located. The case therefore illustrates the value of taking a comprehensive note of tribunal hearings where possible.
PWC loses flexible working discrimination case
20 November 2014
CIPP Policy News Journal
08/04/2015, Page 127 of 521
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