A payment made by an employer on the termination of a contract in lieu of notice was taxable as an emolument, where the right to notice was reserved by the employment contract The reason for a notice period from an employee’s point of view was not that they wanted to work, but that they wanted to be paid until they found other work. Discussing what was an ’emolument’, section 43 does not require an emolument to be a taxable emolument, so that even if the payment is made at a time when the recipient employee is outside the charge to income tax, the payment will still retain its character as an emolument.
Judges:
Chadwick LJ
Citations:
Times 31-Aug-1999, [1999] EWCA Civ 1868, [2000] 1 WLR 540
Links:
Statutes:
Income and Corporation Taxes Act 1988 19(1) Sched E Case 1, Finance Act 1989 43
Jurisdiction:
England and Wales
Cited by:
Cited – MacDonald (HM Inspector of Taxes) v Dextra Accessories Ltd and others CA 28-Jan-2004
The company had set up a trust for the benefit of its employees. The Inspector sought to tax the payments made into the trust as ’emoluments’
Held: The appeal was allowed. The payments were ‘potential emoluments’ which were held by the . .
Lists of cited by and citing cases may be incomplete.
Income Tax
Updated: 31 May 2022; Ref: scu.146783