In HMRC v Forde & McHugh Ltd (CA – 30 May) a company made payments to a funded unapproved retirement benefit scheme for the benefit of one of its directors. HMRC issued a determination that Class 1 national insurance contributions were due in respect of the payments.
The CA upheld the determination (by a 2-1 majority Rimer LJ dissenting). The majority of the CA held that Tullett & Tokyo Forex International Ltd v State for Social Security [2000] EWHC Admin 350 had been wrongly decided. Arden LJ observed that ‘the terms "emoluments" for the purposes of income tax and "earnings" for the purposes of national insurance do not have a common root’.
Accordingly ‘the tax base for income tax is not the same as the contributions base for national insurance’. The history of the relevant provisions showed that ‘Parliament in primary legislation proceeded...
