Stewart Fraser Ltd v Revenue & Customs [2011] UKFTT 46 (TC) (12 January 2011)

Stewart Fraser Ltd v Revenue & Customs [2011] UKFTT 46 (TC) (12 January 2011)

The Tribunal found that the loan waivers were not made to Mr Fraser in his capacity as majority shareholder but as a director/employee, as evidenced by director approval and lack of shareholder involvement. Therefore, the waivers constituted remuneration derived from employment and were subject to Class 1 National...

Source-derived case information.

Citation
[2011] UKFTT 46
Parties
Appellant: Stewart Fraser Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
12 January 2011
Procedural Posture
Appeal / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
National Insurance Contributions, Close Companies, Director's Loan Account, Employment Income, Loan Waiver, Participator, Burden of Proof
Tax Law Social Security Law Company Law National Insurance Contributions Close Companies Director's Loan Account Employment Income Loan Waiver +2 more

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Parties

Stewart Fraser Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Appeal / First Tier Tribunal (tax) Decision

Legal Issues

  1. 1 Whether loan waivers to a director/majority shareholder are derived from employment or shareholding
  2. 2 Whether Class 1 National Insurance Contributions are payable on the waiver of director's loans

Ratio Decidendi

The Tribunal found that the loan waivers were not made to Mr Fraser in his capacity as majority shareholder but as a director/employee, as evidenced by director approval and lack of shareholder involvement. Therefore, the waivers constituted remuneration derived from employment and were subject to Class 1 National Insurance Contributions.

Court Disposition

Appeal dismissed

Orders

  • Decisions under Section 8 of the Social Security (Transfer of Functions) Act 1999 confirmed
  • Appellant liable for Class 1 National Insurance Contributions as assessed