PA Holdings Ltd v HMRC

In PA Holdings Ltd v HMRC (and related appeal) (UT – 7 July) a company (P) had entered into complex arrangements from 2000/01 to 2002/03 under which it paid certain employees bonuses in the form of dividends which were financed from a capital contribution to P from employee benefit funds which in turn were derived from P. The Revenue issued rulings that national insurance contributions were chargeable in respect of the payments (and also imposed determinations under Income Tax (PAYE) Regulations SI 2003/2682 reg 80). P and one of its employees appealed contending that the income was chargeable to income tax under Schedule F and could not also be charged to national insurance contributions.

The First-Tier Tribunal rejected this contention (see Decision TC00063) applying the principles laid down by Ribeiro PJ in Hong Kong Collector of Stamp Revenue v Arrowtown Assets Ltd (6...