Reed Employment Plc and 11 others v The Commissioners for HM Revenue and Customs
| Jurisdiction | UK Non-devolved |
| Judge | Mrs Justice Proudman,Judge Herrington |
| Neutral Citation | [2014] UKUT 0160 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Subject Matter | Tax,9 April 2014 |
| Date | 09 April 2014 |
| Published date | 01 December 2016 |
[2014] UKUT 0160 (TCC)
Reference numbers: TCC-JR/01/2009
TCC-JR/02/2009
FTC/34/2012
INCOME TAX and NATIONAL INSURANCE CONTRIBUTIONS – allowances
for travel and subsistence costs- character of allowances – whether earnings under
ITEPA Part 3 Chapter 1 – Yes – or sums treated as earnings under ITEPA Part 3
Chapter 3 – No – whether recipients had permanent or temporary workplaces –
permanent – travel costs ordinary commuting expenses and not deductible –
whether allowances within dispensations granted pursuant to ITEPA s65 –No –
whether dispensations could lawfully be granted – No
JUDICIAL REVIEW – whether appellants had legitimate expectation that
allowances would not be subject to income tax and NICs and that dispensations
would not be revoked and HMRC would not seek income tax and NICs from
employees retrospectively – No
Whether appellants under obligation as employers to make PAYE deductions in
respect of allowances paid – Yes – appeal and judicial review application dismissed
IN THE MATTER OF JUDICIAL REVIEW PROCEEDINGS
AND ON APPEAL FROM THE FIRST-TIER TRIBUNAL (TAX CHAMBER)
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
REED EMPLOYMENT PLC AND 11 OTHERS
Appellants
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE & CUSTOMS Respondents
TRIBUNAL:
Mrs Justice Proudman DBE
Judge Timothy Herrington
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Sitting in public in London on 23, 24, 25, 28, 29, 30, 31 October and 1 November
2013
Mr Ian Glick QC, Mr Andrew Clarke QC, Mr David Ewart QC and Mr Adam
Rushworth, Counsel, instructed by Slaughter and May, for the Appellants
Mr Malcolm Gammie QC, Mr Adam Tolley and Miss Kate Balmer, Counsel,
instructed by the General Counsel and Solicitor to HM Revenue and Customs,
for the Respondents
© CROWN COPYRIGHT 2014
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GLOSSARY
Decision The decision of the FTT dated 6 January 2012 (Judges
Bishopp and Avery Jones)
Dispensations First dispensation granted on 30 November 1998;
Second dispensation (replacing the first) granted on 9
January 2001;
Third Dispensation (replacing the second) granted on 7
February 2002;
Fourth Dispensation (replacing the third) granted on 7
March 2003; and
Fifth Dispensation (replacing the fourth) granted on 3
February 2004.
Disputed Allowances The sums paid to Employed Temps in respect of travel
expenses which Reed contends were contractually
separate payments to payments of salary.
Employed Temps Employees of Reed placed on assignment with clients.
ERA Employment Rights Act 1996.
FTT First-tier Tribunal (Tax Chamber).
HMRC Used as a shorthand term to include not only Her
Majesty’s commissioners for Revenue and Customs but
also their predecessor bodies, the Inland Revenue, HM
Customs & Excise and the Contributions Agency.
ITEPA Income Tax (Earnings and Pensions) Act 2003.
NICs National Insurance Contributions.
Reed The appellants collectively.
Relevant Period 6 January 2001 to 5 April 2006.
RR Robson Rhodes.
RTA Reed Travel Allowance, the scheme introduced in 1998.
RTB Reed Travel Benefit, the amended scheme which
succeeded RTA in 2002.
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