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22 February 2011
In 2010/11, a retired medical practitioner received a pay award which was back-dated to 2004
In 2010/11 a retired medical practitioner received a substantial sum following a successful pay review backdated to 2004 but I am not sure in which year(s) this sum should be returned.
My reference materials indicate that earnings are treated as received at the earliest of the time when actual payment is made or the time when a person becomes entitled to payment.
The client was certainly entitled to the earnings from October 2004 onwards – that is the outcome of the NHS pay appeal.
However ITEPA 2003 s 15(3)(a) would have brought them into charge in 2010/11 (‘whether the earnings are that year or for some other tax year’).
Sadly FA 2008 Sch 7 para 9 rewrote s 15 and whether by accident or design s 15(3)(a) disappeared.
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