Case Law

Office

In Great Western Railway v Bater 1922 8 TC 231 the definition of ‘office’ was “a subsisting, permanent, substantive position, which had an existence independent of the person who filled it, which went on and was filled in succession by successive holders”.

The meaning of the word ‘office’ was also considered in Edwards v Clinch 1980 STC 438. In this case it was held that an independent local inquiry inspector was not the holder of an ‘office’ within the meaning of the word as used in Schedule E.

Employment

In Market Investigations v Minister of Social Security 1969 2 QB 173, the fundamental test was ‘is the person who has engaged himself to perform these services performing them as a person in business on his own account?’

A professional actress who had entered into separate contracts for each play, film, radio appearance etc. for which she was engaged, was held assessable under Schedule D. Davies v Braithwaite 1931 18 TC 198

In contrast to Davies v Braithwaite, in Fall v Hitchen 1972 49 TC 433 a professional dancer was required to work full-time, during specified hours, for a regular salary, and was not permitted to perform elsewhere without consent. It was held that the taxpayer acted under a contract of service and was assessable under Schedule E.

In Dolan (Inspector of Taxes) v K. National School Teacher 1943 I ITR 656 a nun worked as a qualified national school teacher in a school conducted by her order. She was obliged to the hand over her income to the order by virtue of her vows. She remained liable to tax under Schedule E.

An early Irish case, Roche v Kelly 1968 IR 100 held that the principal test is the right of the master to direct servants as to what is to be done and how it is to be done.

An insurance agent who had purchased his own collection book and was not subject to any restrictions was held to be in business on his own account. McDermott v Loy TL 118 (HC July 1982)

The case of Ready Mixed Concrete (SE) Ltd v Minister of Pensions and National Insurance 1968 2 QB 497 laid down three tests – work and skill, control over the worker, and financial risk. If these were met, a contract of service existed.

In O’Coindealbhain v Mooney 1988 IV ITR 45, the taxpayer acted as branch manager for the Department of Social Welfare. The Court found that a contract for services existed and that the features of the contract were inconsistent with a contract of service as they pointed to an independent contractor.

The case of Hall v Lorimer 1994 STC 23 indicates that it is necessary to consider the personal factors existing outside the terms of each individual contract. In this case, a vison mixer who worked under a series of one and two-day contracts for a wide range of paymasters, employed no staff and did not use his own equipment, was held to be self-employed.

In the leading Irish case of Henry Denny & Sons v Minister for Social Welfare 1997 V ITR 283 the High Court found that a supermarket demonstrator was engaged under a contract of service and the decision was upheld by the Supreme Court. Justice Keane, in his judgment, placed the emphasis on the substance of the contract over its form.

The findings in the Denny case were followed in Tierney v An Post 2000 1 IR 536, Castleisland Cattle Breeding Society Ltd v Minister for Social Affairs 2004 4 IR 150 and ESB v Minister for Social Community and Family Affairs 2006 IEHC 59

In McLoughlin v Director of Public Prosecutions 1986 III ITR 467, members of a fishing crew, who were entitled to a share of the proceeds of sale of the catch, were held not to be employees.

In the UK case of Barnett v Brabyn 1996 STC 716 it was held that Mr Barnett, who was engaged as a video and television technician without a written contract, was an independent contractor. This case emphasised an important point that there is little to be gained from comparing the facts of one case with another when the Judge said, “ factors relevant in one situation may be irrelevant or of no weight in another” The same principle from the Barnett case was applied in Walls v Sinnett 1986 60 TC 150.

In Neenan Travel Limited v Minister for Social and Family Affairs 2011 IEHC 458, the court in this case were asked to determine whether or not a proprietary director was liable to PRSI as a Class A or a Class S contributor. The issues of employed versus self employed for income tax purposes were also examined.

In Brightwater Selection [Ireland] Ltd v Minister for Social and Family Affairs 2011 IEHC 510, this case examined whether an agency worker for Brightwater was engaged under a contract of service and thereby insurable at the PRSI Class A rate of contribution.

Emoluments and Perquisites

A teacher who took night classes under a separate contract with her employer was assessable under Schedule E. Fuge v Mc Clelland 36 TC 571

The main charging words of Schedule E are only applicable to tax money or money’s worth. Tennant v Smith 1892 3 TC 158

In Wilkins v Rogerson 39 TC 44, an employer arranged for a tailor to provide certain employees with a suit up to the cost of £15, and the cost was covered by the employer. It was held that the emolument to be taxed was not the cost of the suit but the price the employee would get if he sold it.

In Connolly v McNamara 3 ITC 341 a company paid the weekly rent payable by its employee under a letting agreement with the council. The employee was not required to live in the house for the purpose of his employment. The High Court held that the employee was assessable under Schedule E on the rent paid.

In Shilton v Wilmshurst 1991 STC 88 a footballer was paid a large sum by his employer to induce him to sign for another club. The payment was held to be an emolument arising from employment.

Payments in respect of promotional rights, which did not relate to services required under the employment contract, were not liable as emoluments under general principles. Sports Club and others v Inspector of Taxes 2000 STC 443

A present of £400, given to a jockey who had just won a race, by the horse’s owner, was held to be an emolument. Wing v O’Connell 1 ITC 170

In Jarrold v Boustead  41 TC 701 a lump sum paid by a Rugby League club to Mr. Boustead as a signing on fee was held to be an inducement payment to give up his amateur status and was not paid in consideration for undertaking to play football.

The transfer of shares to induce the taxpayer to give up his employment position after a fixed period was held not in the nature of a reward for future services. Pritchard v Arundale 1971 47 TC 680

In Teward v IRC 2001 STC 36, the payment by a new employer to a taxpayer, to compensate the taxpayer for no longer being able to participate in a previous employer’s share option scheme, was a taxable emolument of the new employment.

Payment in lieu of notice pursuant to a contractual provision was an emolument of the employment. EMI Group Electronics v Coldicott 1997 STC 1372

Supplementary redundancy payments made irrespective of whether or not employee was actually made redundant, was held to be a taxable emolument. Allen v IRC 1995 STC 945

An ex gratia lump sum paid to employees for the loss of use of a company car was taxable. Bird v Martland 1982 STC 603

Payments made in connection with the taxpayer’s role as chief executive were income and not a “gift” 29TACD2019

Appeal concerns the taxation of an employee share award. 11TACD2018

“This appeal concerned the right of a company to make tax free payments to an employee in respect of travel and subsistence.” 20TACD2018

The case concerned whether earnings of fast food drivers constituted self employment income of the drivers themselves, or whether the earnings were instead employment income. 23TACD2018

This Appeal concerned the year a payment under an income continuance plan falls to be taxed. 69TACD2021

The appeal concerned the treatment of backpay owing to the Appellant. Owing to the wording of section 112(3) TCA 1997, the Appeal Commissioner determined, despite the income being earned from 2013 through to 2019, the income was taxable in the year it was paid to the Appellant. 99TACD2021

This appeal considered whether payments by a company to a proprietary director constituted reimbursement of expenses incurred by him as part of his employment duties or if the payments were emoluments. 113TACD2021

This appeal considered the employment status of doctors and dentists. The Appeal Commissioner determined the contracts to be contracts of service rather than for service. 117TACD2021

This UK Supreme Court decision found that Uber drivers are in fact workers for employment law purposes, not self-employed independent contractors. Uber BV & Ors v. Aslam & Ors [2021] UKSC5

Whether remuneration is taxable in the year which it is earned or actually received. 02TACD2022

Whether the company had correctly treated payments to the taxpayer relating to travel and subsistence. 106TACD2022