- Payments to EBT sub-trust taxable as earnings (OCO Limited v HMRC)
- Original news
- What are the practical implications of this case?
- What was this case about?
- What were the main legal arguments arising?
- What did the FTT decide?
- The redirection principle
- The Antoniades/Autoclenz argument
- The Ramsay principle
- Case details
Tax analysis: the First-tier Tax Tribunal (FTT) found payments to the sub-trust of an employee benefit trust (EBT) were payments of earnings for the purposes of the pay-as-you-earn (PAYE) regime and were also subject to National Insurance contributions (NICs). The finding was based on the FTT’s application of the Ramsay principle, having rejected HM Revenue & Custom’s (HMRC) argument that the contribution was a redirection of earnings.
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