The Best Connection Group Ltd v Revenue and Customs (INCOME TAX AND NATIONAL INSURANCE CONTRIBUTION) [2024] UKFTT 1103 (TC) (06 December 2024)

The Best Connection Group Ltd v Revenue and Customs (INCOME TAX AND NATIONAL INSURANCE CONTRIBUTION) [2024] UKFTT 1103 (TC) (06 December 2024)

The Tribunal held that the salary sacrifice was a valid contractual term, but the payments for subsistence were 'round sum allowances' due to insufficient causal link to actual expenses and thus taxable; travel payments were not round sum allowances but TBC failed to evidence that payments related to actual mileage incurred. The dispensation did not cover the payments as operated. TBC did not exercise reasonable care and was not entitled to Regulation 72 relief. The 2013 determination was likely made to best judgment, but quantum was deferred.

Citation
[2024] UKFTT 1103 (TC)
Parties
Appellant: The Best Connection Group Limited; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
06 December 2024
Procedural Posture
Tax Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment on Liability, Quantum Reserved
Outcome
Appeal dismissed except to the extent that the Appellant can evidence, for specific mileage payments, that the payment related to mileage actually incurred.
Legal Topics
Income Tax, National Insurance Contributions, Salary Sacrifice, PAYE Regulations, Dispensation, Travel and Subsistence Expenses
Tax Law Employment Law Social Security Law Income Tax National Insurance Contributions Salary Sacrifice PAYE Regulations Dispensation +1 more

Case Brief

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Parties

The Best Connection Group Limited

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment on Liability, Quantum Reserved

Legal Issues

  1. 1 Whether salary sacrifice arrangements for travel and subsistence expenses were effective for tax and NICs purposes
  2. 2 Whether payments made were 'round sum allowances' or properly evidenced expense reimbursements
  3. 3 Whether the dispensation covered the payments in question

Ratio Decidendi

The Tribunal held that the salary sacrifice was a valid contractual term, but the payments for subsistence were 'round sum allowances' due to insufficient causal link to actual expenses and thus taxable; travel payments were not round sum allowances but TBC failed to evidence that payments related to actual mileage incurred. The dispensation did not cover the payments as operated. TBC did not exercise reasonable care and was not entitled to Regulation 72 relief. The 2013 determination was likely made to best judgment, but quantum was deferred.

Court Disposition

Appeal dismissed except to the extent that the Appellant can evidence, for specific mileage payments, that the payment related to mileage actually incurred.

Orders

  • Appeal dismissed on all grounds except for specific evidenced mileage payments.
  • Quantum to be determined by agreement or at a further hearing.