Source: All England Reporter
Publisher Citation: [2013] All ER (D) 175 (Jun)
Neutral Citation: [2013] EWHC 1556 (Comm)
Court: Queen's Bench Division, Commercial Court

Judge Mackie QC sitting as a High Court judge

Representation Laurent Sykes (instructed by Spring Law) for the claimant. 
  Alan Gourgey QC and Hui Ling McCarthy (instructed by Davenport Lyons) for the defendant.
Judgment Dates: 19 June 2013


Income tax - Pay as you earn system - Deduction of tax by employer - Defendant being director and shareholder of company - Claimant being director of and employee of company - Defendant agreeing that claimant to have interest in company - Deed requiring defendant to make payments to claimant - Claimant bringing proceedings seeking payment under deed - Whether payments under deed being payments of employment income - Whether defendant having sufficient tax presence in UK to be obliged to deduct tax - , - Income Tax (Pay As You Earn) Regulations 2003, , .

The Case

Income tax Pay as you earn system. The defendant, who was from Greece, was a director and the only shareholder of a company (the company) which carried on business in the UK, of which the claimant was a director and, until a certain date, an employee.The defendant agreed that the claimant would have an interest in the company and, accordingly, a deed was signed which required the defendant to make a series of payments to the claimant. The claimant brought proceedings claiming payment under the deed. The issue was whether the payments under the deed were payments of employment income and whether the defendant had sufficient tax presence in the UK to be obliged to deduct tax. The Chancery Division, in dismissing the claim, held that the payments were employment income from which the defendant had been obliged to deduct tax.

Practice Areas

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