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Reductio ad absurdum
Key points
- In Murphy a group of Metropolitan police officers sued the Met for alleged unpaid overtime and failure to pay certain allowances.
- The Met settled out of court under the terms of a group settlement (or compromise) agreement.
- HMRC then sought to tax the policemen on their share of the £1 250 000 which was paid directly to the lawyers and insurers on the grounds that their employment income was the gross £4.2m as per the settlement agreement.
- The First-tier Tribunal decision found in favour of HMRC but the Upper Tribunal found in favour of the taxpayers.
As someone who did maths at school and university I can still remember some of it and it continues to be useful even in the tax world.
The employment tax case of Keith Murphy (TC7936) is interesting and the Upper Tribunal decision reversing the First-tier Tribunal is even more...
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