- Section 684(7A)(b) ITEPA 2003 was lawfully exercised (Hoey v HMRC)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Private Client analysis: This case principally concerned the exercise by HMRC of the power in section 684(7A)(b) of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), and its interaction with the Income Tax (Pay As You Earn) Regulations 2003 (the PAYE Regulations), SI 2003/2682. In general, the PAYE Regulations , SI 2003/2682 place the obligation to collect tax in respect of an employee’s employment income on employers or deemed employers (or other ‘payers’, as defined). HMRC argued that, by exercising the power in ITEPA 2003, s 684(7A)(b), they had removed the obligation that otherwise rested on the end users of the claimants’ services to operate PAYE, leaving the employee-claimants with the obligation to pay the tax due. The court accepted that the power had validly been exercised by HMRC, and that the result was that the tax due in respect of the claimants’ employment income fell to be collected from the claimants. The court also held that, in the circumstances of Mr Hoey’s appeal, a challenge to the exercise of the power in ITEPA 2003, s 684(7A)(b) was not justiciable in the First-tier Tribunal (FTT). HMRC’s fallback argument in relation to a charge under the transfer of assets abroad (ToAA) provisions also did not succeed. Written by Marika Lemos, barrister at Devereux Chambers who acted for HMRC in the case.
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