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Unexpected consequence

24 November 2008
Categories: Tax cases
Mason (SpC 712)

The appellant an electrician was employed by several different employers to work on North Sea drilling rigs between 1983 and 1998. He would work two weeks on the rig then two weeks on the mainland. He was paid at two-weekly intervals with most paid at one point in the month and a retainer payment paid two weeks later. The aim was to minimise the payment of primary and secondary Class 1 National Insurance by not having to pay contributions on the retainer payment it being below the lower limit. In 1986 the upper limit to employer contributions was removed so the pay practice no longer made any difference to secondary contributions but continued to save primary contributions.

He retired in 1998 and was entitled to a basic state pension and the state earnings related pension scheme pension. However his SERPS pension ...

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