Underhill J said: ‘where an employee has made a positive choice to operate arrangements which have the effect of depriving the Revenue of payment to which it is entitled, contracts giving effect to those arrangements will be unlawful notwithstanding that the employee may genuinely have believed them to be lawful. The position might be different where the initiative came from the employer; but these are not the facts of that case.’ and ‘But even where – surprisingly – they [employees] can show that they were not seeking such advantages [perceived tax advantages] I see nothing objectionable in the law taking the view that workers who actively choose to employ sophisticated arrangements of this kind must take the consequences of their actions, whether they appreciated those consequences or not.’ This particular contract was unenforceable since: ‘[The payment] was not truly a payment to Jonor Services at all, but was a diversion of part of the [employee’s] remuneration, so we cannot escape the conclusion that there was here a misrepresentation to the Revenue, and, to that extent, a fraud upon the Revenue.’
Judges:
Underhill J
Citations:
[2007] UKEAT 0005 – 07 – 0606, UKEAT/0005/07/DA, UKEAT/0005/07
Links:
Citing:
Cited – Salvesen v Simons EAT 22-Oct-1993
Lord Coulsfield referred to the moral dimension applicable where an employee and employer sought to evade taxes by pretending tat the employee was in fact self-employed: ‘It is not necessarily inequitable that persons who seek to take advantage out . .
Cited by:
Cited – Enfield Technical Services Ltd v Payne and Another CA 22-Apr-2008
The appellant company appealed dismissal of their defence to a claim for unfair dismissal that the employment contract was tainted with illegality. The EAT had heard two cases with raised the question of the effect on unfair dismissal claims of . .
Lists of cited by and citing cases may be incomplete.
Employment
Updated: 19 July 2022; Ref: scu.273213
