Laidler v Perry ; Morgan v Perry
| Jurisdiction | England & Wales |
| Judge | The Master Of The Rolls,Lord Justice Danckwerts,Lord Justice Diplock |
| Judgment Date | 04 June 1964 |
| Judgment citation (vLex) | [1964] EWCA Civ J0604-1 |
| Court | Court of Appeal |
| Date | 04 June 1964 |
[1964] EWCA Civ J0604-1
In The Supreme Court of Judicature
Court of Appeal
(Revenue Paper)
The Master of the Rolls
(Lord Denning)
Lord Justice Danckwerts
Lord Justice Diplock
Mr. F. Heyworth Talbot, Q. C., Mr. H. H. Monroe, Q. C. and Mr. Stewart Bates (instructed by Messrs. Linklaters & Paines, 59-67, Gresham Street, E. C.2) appeared as Counsel on behalf of the Appellants.
Mr. Hilary Magnus, Q. C. Mr. J. Raymond Phillips and Mr. Denis Henry (instructed by the Solicitor of Inland Revenue, Somerset House, Strand, W.C.2.) appeared as Counsel on behalf of the Respondent.
This case raises the question whether Christmas presents which are made by an employer to an employee are taxable in the hands of the employee. In the lead industry there are a number of family businesses with long histories. For many yearn they have made Christmas gifts in kind to the staff. Before the war they gave turkeys to the office workers. They entertained the manual workers at Christmas festivities. When the lead industry was formed into a big concern, the group followed the same policy through the individual companies. They did it so as to maintain a feeling of happiness among the staff and good will. During the war these gifts in could not be continued, and National Savings Certificates vouchers were given instead. After the war, in 1948, a resolution was passed by the directors that they would revert to gifts in kind but obtainable by the staff through vouchers from various shops. Each of the employees was allowed a voucher for £10. Anyone who had worked for more than a year would get, at Christmas time, a voucher for the sum of £10, which he could use at a shop of his choice and get an article as his Christmas gift. If he had not. served ten months, he did not get a £10 voucher. The newcomers only got a voucher according to the number of months they had served. There were 2,300 people in the group who got a £10 voucher at Christmas.
Now the question arises whether each individual member of the staff is chargeable with tax under Schedule in respect of his £10. We have two cases before us. Dr. Laidler, who is on the research side and who earns more than £2,000 a year; and Mr. Morgan, who earns less than £2,000 a year. The question in each case is whether this money's worth of £10 a year can properly be said to be emoluments from the employment. "Emoluments there from", are the words of the statute. Emoluments includes "all salaries, fees, wages, perquisites and profits whatsoever."
Now we have been taken through the cases. It was urged before us by Mr. Heyworth Talbot that the approach to these cases has been altered altogether by the recent case in the House of Lords of Hochstrasser v. Mayes in 1960 Appeal Cases, page 376. Mr. Heyworth Talbot said that before that case, the test in the courts was simply this was it a personal gift, or was it remuneration for services? It was assumed that it must be one or the other. Whereas Hochstrasser and Mayes he said, showed that there was a third possibility. The employers there did not make a personal gift to the employee. They only made up to him his loss on selling his house. It was held not to be taxable.
As I read the cases, however, including Hochstrasser v. Mayes, the one question in all these cases is this:- was the payment made, or the money's worth given, to the employee as a reward or remuneration or in return for his services? If it was, it is taxable in his hands. That test explains the case of the Easter offerings (which are by custom a return for the services of the parson), or the cricketer's benefit (where a collection would be made for his benefit if he had. scored more than fifty runs), and the case of the huntsman's tips (where money was collected for the huntsman on Boxing Day). See Wright v. Boyce. which is reported in 36 Tax Cases at page 160.
In this case the...
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