SHIVANI MATHUR v THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS [2024] UKUT 00038 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | MR JUSTICE MILES JUDGE RUPERT JONES |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 13 February 2024 |
UT Neutral citation number: [2024] UKUT 00038 (TCC)
UT (Tax & Chancery) Case Number: UT/2022/000060
Upper Tribunal
(Tax and Chancery Chamber) Hearing venue: The Rolls Building
London EC4A 1NL
Heard on: 13 December 2023
Judgment date: 12 February
2024
INCOME TAX – section 401(1)(a) ITEPA 2003 – taxpayer received £6 million payment from her
former employer in settlement of Employment Tribunal proceedings and claims relating to her prior
employment and its termination – whether FTT erred in law in concluding the payment was received
indirectly in consequence of or otherwise in connection with the termination of her employment
Before
MR JUSTICE MILES
JUDGE RUPERT JONES
Between
SHIVANI MATHUR Appellant
and
THE COMMISSIONERS FOR HIS MAJESTY’S
REVENUE AND CUSTOMS
Respondents
Representation:
For the Appellant: David Goldberg KC, Counsel, instructed by Macfarlanes solicitors
For the Respondents: Akash Nawbatt KC and Joshua Carey, Counsel, instructed by the General
Counsel and Solicitor for His Majesty’s Revenue and Customs
2
DECISION
The issue in this appeal is whether the First-tier Tribunal (“FTT”) erred in law when it decided
that a payment of £6 million made to the Appellant by her former employer in settlement of
Employment Tribunal proceedings was received indirectly in consequence of, or otherwise in
connection with, the termination of her employment for the purposes of s.401(1)(a) Income Tax
(Earnings and Pension) Act 2003 (“ITEPA”).
The FTT in a decision dated 9 March 2022 released as [2022] UKFTT 00088 (TC), decided that
the payment fell within section 401(1)(a) ITEPA and was taxable. It therefore dismissed the
Appellant’s appeal against the closure notice and amendment to her return issued by His Majesty’s
Revenue and Customs (“HMRC”) dated 30 January 2020.
At the hearing before us, as they had below, Mr Goldberg KC appeared for the Appellant and Mr
Nawbatt KC and Mr Carey for HMRC. We are grateful to them for the quality of their written and
oral submissions.
The grounds of appeal
The FTT granted the Appellant permission to pursue three grounds of appeal:
a. Ground 1: The FTT erred in its interpretation of s.401 ITEPA when determining what
is required for a payment to be received directly or indirectly in consequence of, or
otherwise in connection with, the termination of a person’s employment – (“the
Interpretation Ground”);
b. Ground 2: The FTT’s finding that the Appellant’s termination was central to the
discrimination claims made by the Appellant in the Employment Tribunal proceedings
was inconsistent with the evidence and the FTT’s own findings (“the Findings Ground”);
c. Ground 3: The FTT erred in finding that that it could not determine what element of the
amount in question was connected with the termination, and, separately, in determining
that the only manner in which to deal with the possibility of apportionment was to ask if
the Appellant had provided sufficient evidence to quantify the amount of the payment that
should be apportioned as being non-taxable (“the Apportionment Ground)”.
The background
The background to this appeal is set out in full at [5]-[53] of the FTT’s decision. It can be
summarised as follows.
On 23 April 2015 Deutsche Bank AG (“the Bank”) entered into a negotiated settlement with the
New York State Department of Financial Services (“DFS”) which included a consent order (the
“consent order”). The consent order was made in connection with an investigation by DFS, a regulator of
the Bank, into the manipulation of interbank offered rates.
The consent order contained a monetary settlement and “Employee Discipline” section which
stated at paragraph 73: “However, certain employees involved in the wrongful conduct remain
employed at the Bank. The Department orders the Bank to take all steps necessary to terminate the
following seven employees, who played a role in the misconduct discussed in this Consent Order but
who remain employed by the Bank….” On the same day the Appellant was told by the Bank that she
was one of the seven employees “who played a role in the misconduct.”.
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