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| S. 4 Income Tax (earnings & Pensions) Act 2003 |
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defines employment to include
1) contract of employment
2) contract of apprenticeship
3) service for the crown |
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| employment includes office... |
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| defines office: employment which was a subsisting permanent substantive position in existence independent of person who filled it which went on and was filled by subsequent successor |
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| inspector at a public enquiry was not within definition of employment because the position was not permanent and could not be filled by anyone. |
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| office is more then just a job descrtiption. |
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facts: actor who had plays in NY and UK claimed that play in NY was employment therefore only liable to pay tax on UK play.
Revenue: NY play was not an employment and Sch D should apply
Held: Rowlatt J: where method of earning livelihood involves moving from one engagement to another it is not employment. |
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Professional ballet dancer case.
this was employment because the contract was of services and not for services. |
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tax on employment income includes tax on general income and special income derived from employment
General income: earnings from employment or anything treated as earnings |
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facts: Co. had a scheme where co. would bear the burden of any loss incurred due to the move, tp moved and made a loss of £350 which the co. reimbursed.
Revenue: this was earnings as it was connnected with employment.
Held: Upjohn J no this was not earnings, payment would only be an emolument if it was made in referance to services by employer this was just reimbursing the loss. |
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payment can be emolument even though it was not for the services of employment if it is connected with employment.
in this case a payment for the loss of right (joining trade union) which is a part of the employee-employer relationship was held to be taxable under s.62 |
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facts: transfer of a football player from one team to another, the player was given £75k for
held: Lord Templeman - an emolument "from employment" includes emolument from being or becoming an employess, therefore £75k was an emolument of employment. |
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| CA held payment to compensate for non-statutory redundency payment is tax free. payment was made to compensate for the loss of the right and not as inducement to enter into a new contract. |
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| ex gratia payment to an employee for loss of right under share option scheme was not taxable. |
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| cricket player was awarded a benefit season, he was allowed to receive gate money of one of the games. this was held to be a personal payment and no employment payment. |
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| D under club rules was allowed money everytime he played specially good. the revenue said that this was emolument from employment. held yes it was because D had a contractual right which was frequent so taxable. |
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| payments made by the football association to mark England's victory in world cup 1966 were held to be non taxable Brightman J: the payment had no forseeable element of reoccurance. |
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| disqualification of the player from rugby union was for life and he was paid for this, this was not taxable. |
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| Money's worth means something which is of direct monetry value to the employer or something capable of being converted into monetery value to the employee. |
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TP (police officer) was allowed to buy his own clothes suitable for his job and was given allowance of £11.71
held: taxable. |
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| payment by employee in form of reimbursement was not taxable (car parking reimbursement) |
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| reimbursement must be distinguished from expense allowance. |
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| chapter 10 applies to employment related benefits, benefits provided by the employer are treated as paid by reason of employment unless proven otherwise. |
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| tax is on the cash equivalent of the benefit. |
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| usually the cost of the benefit to the person providing it. |
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| Nurseryman's occupation of the property was held not be allowable expenditure as it was not necessary in the performance of his duty. |
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| cost is the marginal cost and not the average cost. |
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| Scholorship was exempt as scholorship income. |
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| scholorship to a relative is no longer exempt but is charged with cash equivelant. |
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| Cars Vans and related benefits for private use are considered as benefits derived from employment. |
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| cars includes any motor vehicle. |
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privte use means any use other then employees business travel.
Note: travelling within work is allowed but if it is to and from work then it is not allowed as that is commuting. |
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TP provided a car for work, his home was 6 miles from the depot he was not allowed to use the car for anything other then business but he was required to take it home overnight.
held: that this was still all for business. |
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| Loan less then the market rate is taxable as the cash equivelant. exceptiong for a loan below £5000 |
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| expenditure must be incurred wholly and exclusively in the performance of the duties of employment. |
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TP employed by local authority, subscribed to medical journals paid for by the authority, he claimed this was allowable expenditure as they helped him keep up-to-date in his profession.
held: Not allowable expenditure becase it was not wholly and exclusively for the purpose of employment. |
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| journalist who claimed cost on newspaper and magazines. it was held that again this was not allowable expenditure as it was not necessary for the performance of thir duties. |
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