ITV Services Ltd v Revenue And Customs [2013] EWCA Civ 867 (23 July 2013)

Parties

Procedural Posture

Appeal / Court of Appeal (civil Division) on Appeal From Upper Tribunal (tax and Chancery Chamber)

Legal Issues

1. 1 Whether actors engaged by ITV under certain contracts are 'employed earners' for National Insurance purposes under the Social Security (Categorisation of Earners) Regulations 1978 as amended
2. 2 Whether payments made to actors include 'any payment by way of salary' within the meaning of paragraph 5A of Schedule 1 to the Regulations
3. 3 Proper interpretation of 'salary' under paragraph 5A, especially condition (d): 'computed by reference to the amount of time for which work has been performed'

Ratio Decidendi

The Court held that the correct interpretation of 'salary' under paragraph 5A requires that the payment be computed by reference to the amount of time for which work has actually been performed, not merely by reference to contractual availability or other services. Payments that buy out availability or intellectual property rights, or are not computed by reference to time worked, do not constitute 'salary' for the purposes of the Regulations. However, where collective agreements are incorporated and provide for daily or periodical payments for work done, those payments do constitute 'salary'. Thus, actors whose contracts incorporate such provisions are 'employed earners' for NICs...

Court Disposition

Appeal allowed in part

Orders

• The appeal is allowed to the extent that only those actors whose contracts provide for payments computed by reference to time worked (including via incorporated collective agreements) are to be treated as 'employed earners' for NICs purposes; others are not.