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' lacking a sufficient causal link to actual expenses and thus subject to tax and NICs. Payments for travel (mileage) were not 'round sum allowances' but the Appellant failed to prove, on the balance of probabilities, that all or a specified percentage of such payments related to actual mileage incurred. The dispensation did not cover the subsistence or public transport payments as they fell outside its terms. The Appellant did not exercise reasonable care in compliance and was not entitled to a Regulation 72 direction. The 2013 determination was likely made...

Citation
[2024] UKFTT 1103
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 establish, by evidence, that a specific mileage payment related to actual mileage incurred.
Legal Topics
Income Tax, National Insurance Contributions, Salary Sacrifice, Travel and Subsistence Expenses, PAYE Regulations, Dispensation, Overarching Employment Contracts
Tax Law Employment Law Social Security Law Income Tax National Insurance Contributions Salary Sacrifice Travel and Subsistence Expenses PAYE Regulations +2 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 the salary sacrifice arrangement was a valid contractual term despite lack of detail.
  2. 2 Whether payments for subsistence and travel were 'round sum allowances' lacking sufficient causal link to expenses incurred.
  3. 3 Whether evidence established that payments related to actual mileage or expenses incurred.

Ratio Decidendi

The Tribunal held that the salary sacrifice was a valid contractual term, but the payments for subsistence were 'round sum allowances' lacking a sufficient causal link to actual expenses and thus subject to tax and NICs. Payments for travel (mileage) were not 'round sum allowances' but the Appellant failed to prove, on the balance of probabilities, that all or a specified percentage of such payments related to actual mileage incurred. The dispensation did not cover the subsistence or public transport payments as they fell outside its terms. The Appellant did not exercise reasonable care in compliance and was not entitled to a Regulation 72 direction. The 2013 determination was likely made...

Court Disposition

Appeal dismissed except to the extent that the Appellant can establish, by evidence, that a specific mileage payment related to actual mileage incurred.

Orders

  • Appeal dismissed except for specific proven mileage payments.
  • Quantum to be determined by agreement or at a later hearing.