References: [1991] 1 AC 684
Coram: Lord Templeman
The taxpayer was transferred from one football club to another. He was paid £75,000 to persuade him to move. The revenue appealed a decision that this was not a sum taxable as an emolument under Schedule E by the new employer.
Held: The appeal was allowed. A payment was ‘from’ an employment if it was made as a reward for past services or as an inducement to take up employment. There was no necessity to show hat a payment by a third party had any interest in the past performance of the employment contract.
Statutes: Income and Corporation Taxes Act 19885
This case cites:
- Appeal from – Shilton -v- Wilmshurst (Inspector of Taxes) CA ([1990] 1 WLR CA)
The taxpayer was a goalkeeper employed by Nottignham Forest Football Club. On his transfer to Southampton, he was paid £75,000. The revenue appealed a finding that this was not taxable under Schedule E.
Held: To be taxcable it had to be . . - Considered – Hamblett -v- Godfrey (Inspector of Taxes) CA ([1987] 1 All ER 916, [1986] 59 TC 694)
Affirmed. A single one off lump sum payment was found to be an emolument without consideration as to whether or not it was a capital payment. Miss Hamblett ‘received her payment as a recognition of the fact that she had lost certain rights as an . . - Disapproved – Pritchard (Inspector of Taxes) -v- Arundale ChD ([1972] 3 All ER 1011, 47 TC 680)
Megarry J discussed whether tips receieved were part taxable as an emolument: ‘I think the question to be tested in this way is only one question. Either the emoluments are within the statutory word ‘therefrom’, as explained by the cases, or they . . - Applied – Hochstrasser -v- Mayes HL ([1960] AC 376)
With reference to a charge to tax under Schedule E the Act on profits or gains from employment, or emoluments: ‘For my part, I think that [the meaning of the statutory words] is adequately conveyed by saying that, while it is not sufficient to . . - Cited – Bray -v- Best HL ([1989] STC 159)
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. . .
This case is cited by:
- Appealed to – Shilton -v- Wilmshurst (Inspector of Taxes) CA ([1990] 1 WLR CA)
The taxpayer was a goalkeeper employed by Nottignham Forest Football Club. On his transfer to Southampton, he was paid £75,000. The revenue appealed a finding that this was not taxable under Schedule E.
Held: To be taxcable it had to be . . - Applied – Ian Wilson (Hm Inspector of Taxes) -v- Stephen Clayton ChD (Bailii, [2004] EWHC 898 (Ch), Times 07-Jun-04, Gazette 13-May-04, [2004] STC 1022)
Taxability of compensation paid on compromise of claims after dismissal. The employer introduced new terms, withdrawing car benefits. Having refused the new terms the taxpayer was dismissed. A tribunal held him unfairly dismissed. The council . . - Cited – Wilson (HM Inspector of Taxes) -v- Clayton CA (Bailii, [2004] EWCA Civ 1657, Times 12-Jan-05)
The claim against the defendant at the tribunal had been settled by a compromise which had then been the subject of an order by the tribunal. The Revenue sought to charge the payment to income tax.
Held: It had been paid ‘in connection with’ . .