Telfer v Sakellarios [2013] EWHC 1556 (Comm) (19 June 2013)

Telfer v Sakellarios [2013] EWHC 1556 (Comm) (19 June 2013)

The payments under the Deed were employment income, not consideration for a beneficial interest in shares. The Defendant was obliged to deduct PAYE at the higher rate using the Claimant's tax code, as he had sufficient UK tax presence. The Defendant has, in principle, a right to claim reimbursement for past sums...

Source-derived case information.

Citation
[2013] EWHC 1556 (Comm)
Parties
Claimant: Nicholas David Telfer; Defendant: Costas Sakellarios
Jurisdiction
England and Wales
Judgment Date
19 June 2013
Procedural Posture
Commercial Claim for Payment Under a Deed / High Court Judgment After Trial
Outcome
Claim dismissed as to net payment; Defendant obliged to deduct PAYE at higher rate; Defendant entitled in principle to reimbursement for past overpayments, subject to HMRC clarification; no final orders made pending HMRC disclosure.
Legal Topics
Interpretation of Contracts, PAYE Obligations, Employment Income, Restitution for Mistake, Implied Terms, Capital Gains Tax Vs Employment Income
Contract Law Employment Law Tax Law Interpretation of Contracts PAYE Obligations Employment Income Restitution for Mistake Implied Terms +1 more

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Parties

Nicholas David Telfer

Claimant

Costas Sakellarios

Defendant

Procedural Posture

Commercial Claim for Payment Under a Deed / High Court Judgment After Trial

Legal Issues

  1. 1 Whether payments under the Deed constituted employment income subject to PAYE
  2. 2 Whether the Defendant was obliged to deduct tax at source
  3. 3 Whether the Claimant had a beneficial interest in shares or only a right to value

Ratio Decidendi

The payments under the Deed were employment income, not consideration for a beneficial interest in shares. The Defendant was obliged to deduct PAYE at the higher rate using the Claimant's tax code, as he had sufficient UK tax presence. The Defendant has, in principle, a right to claim reimbursement for past sums that should have been deducted but were not, based on mistake, but not on an implied term. No indemnity for tax liability arises under the Deed. No final orders are made until HMRC's position is clarified.

Court Disposition

Claim dismissed as to net payment; Defendant obliged to deduct PAYE at higher rate; Defendant entitled in principle to reimbursement for past overpayments, subject to HMRC clarification; no final orders made pending HMRC disclosure.