In E.ON UK plc v HMRC [2022] UKUT 196 (TCC) (19 July 2022) the Upper Tribunal (UT) allowed the company’s appeal against the First-tier Tribunal’s (FTT) decision that a facilitation payment to an employee in respect of adverse changes to a pension scheme was derived from employment and taxable as employment income concluding that the FTT had made errors of law and set aside and re-made the decision.
The company wished to reduce the costs associated with its defined benefits pension schemes. Following consultation with unions and employees an integrated package was agreed. Pursuant to the terms of the integrated package adverse changes were made to the pension rights of participants in the retirement balance scheme which would effectively result in the participants being required to increase their level of future contributions to retain the same level of pensions benefits. In return the company made facilitation payments to the...
