Negative earnings: how wide is their scope?

Money or money’s worth is regularly transferred by employers to employees in consideration of services provided by the employees. What is less common is value being transferred in the opposite direction. However, since the financial crisis, provision may be required under remuneration codes for cash or share-based remuneration to be forfeited and the Covid-19 pandemic has resulted in employees handing back part of their remuneration to keep their employers afloat. This has raised the question whether the employees might be entitled to tax relief on the basis that these transfers constitute ‘negative earnings’. The Martin case confirms that contractual cash repayments may be negative earnings if arising from the employment. But it begs the question of the status of other value transfers, such as voluntary repayments and the forfeiture of shares or share options.