Harrison v Revenue & Customs [2012] UKFTT 737 (TC) (29 November 2012)

Harrison v Revenue & Customs [2012] UKFTT 737 (TC) (29 November 2012)

The payment of £4,153.85 was made pursuant to the contractual PILON clause in Mr Harrison’s employment contract and is therefore taxable as general earnings under s 6 ITEPA 2003. The continued provision of benefits after termination did not alter the contractual nature of the payment or its tax treatment.

Citation
[2012] UKFTT 737
Parties
Appellant: Kayne Harrison; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
29 November 2012
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
Income Tax, Employment Termination Payments, Contractual PILON, Taxation of Benefits, Self Assessment
Tax Law Employment Law Income Tax Employment Termination Payments Contractual PILON Taxation of Benefits Self Assessment

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Parties

Kayne Harrison

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the payment made to Mr Harrison was a contractual payment in lieu of notice (PILON) taxable as general earnings or a non-contractual termination payment falling within Chapter 3 of Part 6 ITEPA 2003 and eligible for the £30,000 exemption.
  2. 2 Whether continued provision of benefits after termination affected the tax treatment of the payment.

Ratio Decidendi

The payment of £4,153.85 was made pursuant to the contractual PILON clause in Mr Harrison’s employment contract and is therefore taxable as general earnings under s 6 ITEPA 2003. The continued provision of benefits after termination did not alter the contractual nature of the payment or its tax treatment.

Court Disposition

Appeal dismissed

Orders

  • HMRC’s amendment to Mr Harrison’s self-assessment return for 2005-06 is upheld as varied by the statutory review; net tax due is £95.22.