[2023] UKUT 238 (AAC)

Mr Najib further drew my attention to the fact that in paragraph 3 (see pages iii-vi of the Appendix), the original scheme provided detailed criteria against which the calculation required by paragraph 2C was to be carried out. These were summarised by Ward LJ as follows:

“10.

I need not set out paragraph 3 in full, but in summary it provides that where paragraph 2C applies then earnings mean the gross receipts of the employment. Paragraph 3(3) provides for deductions from the gross receipts of any expenses reasonably incurred and wholly and exclusively defrayed for the purposes of the business, any value added tax, income tax, National Insurance and one half of any retirement annuity payment or personal pension scheme premium. Business expenses are further defined in sub- paragraph (4) sub-paragraph (5) providing how income tax is to be determined and sub- paragraph (6) how National Insurance is to be calculated. The point to note is that the net income figure thus derived is not necessarily the same as the net figure which would be reached under paragraph 2A.”

Mr Najib submits that neither regulation 69, nor any other provision of the 2012 regulations, contains such criteria. I am asked to conclude that, in the absence of criteria, it cannot have been intended that the calculation required by the previous two schemes was still required by the 2012 scheme. Acceptance of that submission would mean that the Second, Third and Fourth Interpretations cannot be correct.