RCI Europe Ltd v Kate Woods (HM Inspector of Taxes): ChD 16 Dec 2003

The company made payments to a former director in return for a severance agreement which restricted his future business activities.
Held: Despite the fact that all payments were made only after his employment had been terminated, they remained subject to payment of National Insurance contributions. ‘the required connection to trigger application of TA section 313 of office or employment with a present, past or future holding embraces a real connection with the termination of such holding or employment. ‘
The Hon Mr Justice Lightman
Times 09-Jan-2004, [2003] EWHC 3129 (Ch), [2004] STC 315, [2004] STI 45
Social Security Contributions and Benefits Act 1992 4(4)
England and Wales
CitedBeak v Robson HL 1942
The issue was whether a payment to an employee in return for a restrictive covenant escaped tax. The obligations flowing from the contract of service and the remuneration to be received by the Respondent in respect of that service were entirely . .
CitedCommissioners of Inland Revenue v Lactagol 1954
A company, at the relevant time director controlled, made a payment to its managing director in consideration for his undertaking not to compete with the company within five years of the date when he would leave its service.
Held: The . .
CitedVaughan-Neil v Inland Revenue Commissioners ChD 1979
All that is required for a severance payment to be taxable is that there is a ‘connection’ between the actual, prospective or past holding of the employment and the giving of the undertaking. . .
CitedCartlidge v Chief Adjudication Officer CA 1986
The section refers to ‘an employed earner who has lost employment as an employed earner by reason of a stoppage of work . .’ An employed earner can ‘lose his employment’ temporarily or permanently. . .
CitedBray v Best HL 1989
There was not necessarily subsumed in the concession that a payment constituted an emolument from employment a conclusion that the payment must therefore be for a chargeable period within the aggregate period during which the employment subsisted. . .

These lists may be incomplete.
Updated: 21 March 2021; Ref: scu.188914