E.ON UK Plc v Revenue and Customs (INCOME TAX AND NATIONAL INSURANCE CONTRIBUTIONS) [2021] UKFTT 156 (TC) (15 May 2021)

E.ON UK Plc v Revenue and Customs (INCOME TAX AND NATIONAL INSURANCE CONTRIBUTIONS) [2021] UKFTT 156 (TC) (15 May 2021)

Facilitation Payments were part of an integrated package negotiated between employer and unions, conditional on acceptance of revised pension terms, and constituted remuneration 'from' employment; they are taxable under ITEPA 2003 s.9(2) and subject to NICs under SSCBA 1992 s.3(1).

Citation
[2021] UKFTT 156
Parties
Appellant: E. ON UK Plc; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
15 May 2021
Procedural Posture
Income Tax and National Insurance Contributions Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal refused
Legal Topics
Income Tax, National Insurance Contributions, Pension Schemes, Employment Remuneration
Tax Law Employment Law Income Tax National Insurance Contributions Pension Schemes Employment Remuneration

Case Brief

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Parties

E. ON UK Plc

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Income Tax and National Insurance Contributions Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether Facilitation Payments made to employees under revised pension scheme terms are taxable as earnings 'from' employment under ITEPA 2003 s.9(2) and SSCBA 1992 s.3(1)
  2. 2 Whether Tilley v Wales applies to exempt such payments
  3. 3 Whether the 'replacement principle' renders the payments non-taxable

Ratio Decidendi

Facilitation Payments were part of an integrated package negotiated between employer and unions, conditional on acceptance of revised pension terms, and constituted remuneration 'from' employment; they are taxable under ITEPA 2003 s.9(2) and subject to NICs under SSCBA 1992 s.3(1).

Court Disposition

Appeal refused

Orders

  • E. ON UK Plc's appeal against HMRC's determination and decision is dismissed.
  • Facilitation Payment to Mr Brotherhood is subject to income tax and NICs.