32

Endnotes

¹ For comparative material and analysis, see Taxation of Fringe Benefits (OECD, 1988) and Scott, on Australia and New Zealand, in Sandford (ed), Key Issues in Tax Reform (1993), 22; see also Carmody, Australian Tax Research Foundation Study No 29 and Elmgreen, Study No 3.
² See Homer and Burrows, Tolleys Tax Planning 2002–2003, ch 17.
³ ITEPA ss 7(2) and 683(1)
⁴ Sunday Times, 30 November 1986.
⁵ Revenue Statistics 1999, Table 4.1 (for 1997–1998).
⁶ The Economist, 8 August 1992; the doubling of the car charge raised £1.4 bn for the Exchequer.
⁷ Simons, Personal Income Taxation (University of Chicago, 1938), 53.
⁸ , ⁷ On liability to NIC see Tiley and Collison UK Tax Guide §§52.15 et seq and §53.08 et seq.
⁹ , ⁸ Taylor, The Modernisation of Britain’s Tax and Benefit System Report No 2 (1997), para 2.16.
¹⁰ [1892] AC 150, 3 TC 158, HL.
¹¹ [1892] AC 150, 162, 3 TC 158, 169.
¹² 5 & 6 Vict (c 35), s 163.
¹³ Nor was he assessable under schedule A since it was not he but the Bank which was the occupier; [1892] AC 150, 158, 3 TC 158, 166, per Lord Watson; ibid, 162, 169 per Lord Macnaghten.
¹⁴ ibid, 156, 164; to the same effect see ibid, 159, 167, per Lord Watson; per Lord Macnaghten, at 163, 170; ibid, 164, 171, per Lord Field; and ibid, 165, 172 per Lord Hannen. Lord Morris concurred.
¹⁵ With the bank’s tacit consent he used the premises for an insurance business but this was ignored. At one time it was thought that where a person was in beneficial occupation, but that occupation was not convertible (into money or money’s worth), then if the employer paid the schedule A tax in respect of that occupation, the employee was not taxable in respect of that payment under schedule E (M’Dougall v Sutherland (1894) 3 TC 261; overruled in IRC v Miller [1930] AC 222, 15 TC 25).
¹⁶ [1961] AC 352, 378–9, 39 TC 82, 125, per Lord Radcliffe.
¹⁷ Bootle v Bye [1996] STC (SCD) 58; it was also relevant that the event which would have made the intrinsic value realisable was outside the taxpayer’s control.
¹⁸ [1892] AC 150, 156, 3 TC 158, 164.
¹⁹ For example, Ede v Wilson and Cornwall [1945] 1 All ER 367, 26 TC 381 shares were issued subject to a condition that they would not be sold without employer’s permission; it was held that valuation must take account of the restriction on the effect of a term forbidding assignment of a debt. On effectiveness of a prohibition on assignment of a chose in action, see Helstan Securities Ltd v Hertfordshire County Council [1978] 3 All ER 262.
²⁰ Lord Reid in Heaton v Bell [1969] 2 All ER 70, 79, 46 TC 211, 247.
²¹ [1969] 2 All ER 70, 95, 46 TC 211, 264.
²² Cf the test that in order to be deductible, an expense must be required by the job, and not simply by the employer (see below at §18A.3).
²³ See also ESC A60 (agricultural workers outside those bits of the benefits code applicable to directors and employees earning at least £8,500.
²⁴ [1969] 2 All ER 70, 46 TC 211.
²⁵ [1969] 2 All ER 70, 84, 46 TC 211, 263, per Lord Morris of Borth-y-Gest; ibid, 96, 265, per Lord Diplock. To the same effect, but by a different route, see Lord Reid, dissenting (at 79, 247). While Lord Morris and Lord Diplock would have quantified the benefit as the sum subtracted each week 352 (the number of weeks in the year), Lord Reid would have taken the same sum 350, since two weeks’ notice has to be given before returning to the scheme. Therefore, while Lord Morris and Lord Diplock appear to tax the benefit foregone, Lord Reid would appear to tax the benefit that could be obtained. Lord Reid seems more correct.
²⁶ The correct construction of the agreement was that there was no change in the wage but the employers were entitled to deduct a sum each week in respect of the use of the car. It followed that tax was due on the gross wage each week, with no deduction for tax purposes for the sum withheld on account of the car.
²⁷ Westall v McDonald [1985] STC 693, 721, 58 TC 642, 679.
²⁸ On s 120 [ex 157] see below §17A.4.1.
²⁹ ITEPA s 119, TA 1988, s 157A, original provision added by FA 1995, s 43; see Inland Revenue press release, 21 July 1994, (1994) Simon’s Tax Intelligence 888.
³⁰ (1935) 19 TC 174.
³¹ [1961] 1 All ER 358, 39 TC 344.
³² Abbott v Philbin [1961] AC 352, [1960] 2 All ER 763, 39 TC 82. See below at §16.2.2.
³³ [1919] SC 534, 7 TC 176. See, to same effect, Sanderson v Durbridge [1955] 3 All ER 154, 36 TC 239; Evans v Richardson (1957) 37 TC 178.
³⁴ Corry v Robinson [1934] 1 KB 240, 18 TC 411. The tax paid on a rent allowance was reimbursed by police authorities in the following financial year by means of a compensatory grant. In principle, the grant itself was taxable: see HC Written Answer, 31 January 1986, (1986) Simons Tax Intelligence 40; the grant was abolished in 1995 under the Police Regulations 1995 (SI 1995/215).
³⁵ However, see s 316 enacting ESC A1 (flat rate allowances for clothes and tools), and the even more extraordinary s 306 enacting ESC A6 (no tax on allowances paid to miners in lieu of their free coal).
³⁶ In Cordy v Gordon [1925] 2 KB 276, 9 TC 304 the taxpayer was employed at an asylum and received a salary together with board, lodging, washing and uniform, for which he was required to pay sums which varied according to the cost of living: he was held assessable on the gross salary. See also Machon v McLoughlin (1926) 11 TC 83; Bruce v Hatton [1921] 2 KB 206, 8 TC 180. Cf Edwards v Roberts (1935) 19 TC 618.
³⁷ See Wilkins v Rogerson [1961] 1 All ER 358, 39 TC 344, per Donovan LJ.
³⁸ Richardson v Worrall [1985] STC 693, 58 TC 642.
³⁹ The presence of joint liability on the part of employer and employee does not necessarily mean that discharge by the employer will be a taxable emolument (see Richardson v Worrall [1985] STC 693, 718, 58 TC 642, 675.
⁴⁰ ITEPA s 81; on presumptions and families see ss 73(2) and 74.
⁴¹ ITEPA ss 78–80; the Revenue must be sure of being able to collect the tax to be charged for the sums on money received and sure that the tax can be collected under the PAYE scheme 79(2).
⁴² ITEPA s 73(3).
⁴³ ITEPA ss 75(1) and 76.
⁴⁴ ITEPA s 95.
⁴⁵ Defined in ITEPA s 84; the charging provision is s 87 (ex TA 1988, s 141).
⁴⁶ ITEPA ss 82 and 83.
⁴⁷ ITEPA s 87(2) exs 141. The formula is slightly modified for transport vouchers (87(4)) and cheque vouchers (87(5)).
⁴⁸ ITEPA s 95.
⁴⁹ ITEPA s 88(1). For cheque vouchers, the year is that in which the voucher is handed over in exchange for the goods, etc ITEPA s 86(2).
⁵⁰ FA 1988, ss 47, 48.
⁵¹ ITEPA s 86 TA 1988, s 141(6).
⁵² ITEPA ss 90–94.
⁵³ ITEPA s 94. These interest charges were originally created to give rise to liability under FA 1981, s 71, but this was removed by FA 1982, s 45.
⁵⁴ ITEPA ss 362 and 363. On vouchers for in-house sports facilities, see below at §17A.3.
⁵⁵ ITEPA ss 266 and 267.
⁵⁶ ITEPA ss 268–270, 270 making a cross reference to s 324.
⁵⁷ ITEPA s 324(6).
⁵⁸ ITEPA s 97.
⁵⁹ By reason of the definition in ITEPA s 67 (ex TA 1988, s 168). On scope of director see R v Allen [2001] STC 1537 HL. On the similar Court of Appeal decision see McCutcheon, Taxation 1999, Vol 144, 31 with regard to certain taxpayers and the scope of what is now ITEPA s 22, ex TA 1988, s 192(2). On other aspects see De Souza (1999) Private Client Business 1.
⁶⁰ X is not chargeable under s 203 (ex s 154) because ss 202, 154(2) excludes s 203 if any of parts 3 to 7 apply.
⁶¹ The predecessor s 109 (s 146A) was added by FA 1996, s 106; it also applies to s 105 ex 146.
⁶² ITEPA s 97(2).
⁶³ ITEPA s 98.
⁶⁴ ITEPA s 97 TA 1988, s 145(7).
⁶⁵ Ie if the occupation comes within the three categories of non-beneficial occupation, the charge under ss 203, 154 must not exceed 10% of the total emoluments (ITEPA s 313 ex TA 1988, s 163); see below §17.4.6.
⁶⁶ ITEPA ss 99(1) and (2) and 100; on Chevening House see s 101 and note that s 315 does not apply.
⁶⁷ ITEPA s 99(3)–(5).
⁶⁸ [1892] AC 150, 3 TC 158, HL.
⁶⁹ Vertigan v Brady [1988] STC 91, 60 TC 624.
⁷⁰ ibid.
⁷¹ ITEPA s 105.
⁷² Stones v Hall [1989] STC 138, 60 TC 738.
⁷³ ITEPA s 105(4) TA 1988, s 145(2).
⁷⁴ ITEPA s 364.
⁷⁵ FA 1977, s 33A added by FA 1983.
⁷⁶ ITEPA s 106 TA 1988, s 146(4).
⁷⁷ ITEPA s 107 ibid, s 146(6), but this does not apply if the employee’s first occupation began before 31 March 1983 (s 146(8)).
^{78 , 68} ibid, 107(3) (s 146(11)).
⁷⁹ Inland Revenue Press Release, 23 February 1999, Simon’s Weekly Tax Intelligence 1999, 306.
⁸⁰ If X had purchased the property in 1987, the market value of the property on 6 April 1996 would have been substituted for the purchase price.
^{81 , 71} Inland Revenue Press Release, 16 March 1993, para 2, Simon’s Tax Intelligence 1993, 439. The concessions superseded were A5 and A64 based on Hochstrasser v Mayes.
⁸² ITEPA s 287.
⁸³ ITEPA s 716.
⁸⁴ ITEPA s 274 TA 1988, sch 11A para 3(3).
⁸⁵ ITEPA ss 272(1) benefits and 272(3) (expenses). Both eligible expenses and eligible benefits may be amended by Treasury Order (ibid, s 286 sch 11A, paras 15, 23).
⁸⁶ ITEPA s 272 referring to ss 277–281. Ibid, sch 11A, paras 7–13; and Inland Revenue Press Release, 14 April 1993, Simons Tax Intelligence 1993, 626.
⁸⁷ Ibid, ss 272 and 284.
⁸⁸ Ibid, s 272(1) and 273, sch 11A, paras 3, 25.
⁸⁹ Ibid, s 273, sch 11A, para 5.
⁹⁰ Ibid, s 273(4), sch 11A, para 5(4).
⁹¹ Inland Revenue Press Release, 14 April 1993, Simons Tax Intelligence 626.
⁹² ITEPA s 287, TA 1988, sch 11A, para 24.
⁹³ Ibid, s 288, 191B.
⁹⁴ Ibid, s 282, sch 11A, paras 12(4), 21A(7), (8).
⁹⁵ ITEPA s 273.
⁹⁶ ITEPA s 311TA 1988, s 588(1) (sch E), TA 1988, s 588(3) for deduction in computing profits and TA 1988, s 588(4) for treatment as expense of management of investment company.
⁹⁷ ITEPA s 311(4), TA 1988, s 589(3)–the two year employment condition means 2 years before he starts the course or ends the employment whichever is the earlier.
^{98 , 84} ITEPA s 311(3), TA 1988, s 589(3).
⁹⁹ ITEPA s 311(4)(b) TA 1988, s 589(4); re-employment within 2 years is a breach of the conditions and this triggers a charge under s 312; any breach of these conditions has to be reported within 60 days of the employer coming to know of it (TA 1988, s 588(6)) and the normal 6 year time limit for assessments runs from the end of the year in which the breach occurred (s 588(5)); there are also Revenue information-gathering powers in s 588(7).
¹⁰⁰ Statement of Practice SP 4/86.
¹⁰¹ Ex TA 1988, s 200B–200H added by FA 1998 and FA 2000.
¹⁰² Extra-statutory concession A63.
¹⁰³ ITEPA s 253 TA 1988, s 200C.
¹⁰⁴ ESC A64 (still in force).
¹⁰⁵ ITEPA s 255(3) ITA 1988, s 200E(3) added by FA 2000, s 58.
¹⁰⁶ ITEPA s 255(3).
¹⁰⁷ ITEPA s 257.
¹⁰⁸ ITEPA s 258 and s 253 for s 250 TA 1988, s 200F(1), (4).
^{109 , 92} TA 1988, s 200F(2).
^{110 , 93} ITEPA s 259 TA 1988, s 200F(3), (5).
^{111 , 94} Defined in s 260 200G(2).

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