[2025] UKUT 00278 (TCC)

2008/09 – HMRC issued a Regulation 80 determination in the sum of £197,427.60 for “Mr Adrian Wynne”, the sole director of the company. The PAYE settlement figure for that year was £199,768, referencing contributions for the benefit of Mr Wynne under two different schemes, the Montpelier BBT and a separate employee benefit trust, although it appears from the correspondence that the sum due related entirely to a contribution under the Montpelier BBT. The Regulation 80 determination figure was capable of being uplifted, on the basis set out above, to the PAYE settlement figure.

2009/10 – HMRC issued a Regulation 80 determination in the sum of £120,200 for “All employees receiving payments from the business benefit trust”. The PAYE settlement figure for that year was £198,022.60, again referencing contributions for the benefit of Mr Wynne under the Montpelier BBT and another employee benefit trust, although again the sum appears to relate entirely to a contribution of £600,000 under the Montpelier BBT. The Regulation 80 determination figure was capable of being uplifted, on the basis set out above, to the PAYE settlement figure.

2009/10 – a second contribution for the benefit of Mr Wynne was made in March 2010, for £450,000, this time under EFRBS scheme 10567557 (scheme 105), leading to a separate settlement of PAYE in the sum of £159,574.47. There is no dispute about that settlement; but it is relevant in the context of a further contribution under the same scheme, addressed in the next paragraphs.

2009/10 – a third contribution for the benefit of Mr Wynne was made, also in March 2010, for £600,000, also under scheme 105. Fluid London originally contended that there was no Regulation 80 determination in relation to that contribution. It has now been established that HMRC did issue a further Regulation 80 determination for the tax year 2009/10 in the sum of £173,044.20 for “All employees receiving payments from the business benefit trust – Mr A Wynne”. That was sent under cover of a letter dated 14 February 2014 which stated that the determination was in respect of the use of scheme 105, and set out HMRC’s view that “contributions made to an EFRBS under the arrangements disclosed to HMRC under the above scheme reference may be earnings subject to PAYE tax and Class 1 NICs”.

The PAYE settlement for 2009/10 did not, however, reference the March 2010 contribution of £600,000. Instead, that contribution was included in the PAYE settlement for the following year 2010/11, alongside a further contribution for the benefit of Mr Wynne in the 2010/11 tax year, giving a total PAYE figure of £593,537.20. The PAYE settlement figure for 2010/11 therefore included an amount referable to a contribution for which HMRC had issued a Regulation 80 determination, which was capable of being uplifted on the basis set out above.

We do not consider it material that the settlement figure in this regard was included in the calculation for the wrong tax year. The question, for the purposes of DRRS §3.5.1.27, is whether the amount paid under the settlement agreement was an amount that HMRC had the power to recover at the time the agreement was made. For the reasons just given, HMRC did have the power to recover that amount. Contrary to Mr Goodfellow’s submissions, the further contribution, made in respect of the same scheme in relation to which a further Regulation 80 determination had already been made, was clearly within the scope of the determination.

2009/10 – there is also a dispute regarding the NICs element of the March 2010 £600,000 contribution for the benefit of Mr Wynne. As with the PAYE settlement figure for that contribution, the NICs element of the settlement was included in the settlement for the year 2010/11. There is no dispute that two s. 8 decisions were issued for 2009/10. A county court claim was also issued by HMRC on 30 March 2015 for the tax year ended 2010, referring to “Class 1 NIC due on Employer Financed Retirement Benefit Scheme”, claiming £150,803.16 plus interest.

Fluid London’s submission was that the s. 8 decisions related to the NICs on the first two contributions for the benefit of Mr Wynne for the 2009/10 tax year (based on the Regulation 80 determinations sent at the same time), and did not cover the March 2010 £600,000 contribution; and that the county court claim likewise did not refer to that contribution. Mr Elliott contended that any amendment to the county court claim would not have arisen out of the same facts or substantially the same facts, given that any NICs payable in respect of the March 2010 £600,000 contribution would have related to a different transaction and a different amount to those already in issue in the county court claim.

We reject those arguments. The second of the two s. 8 decisions stated that it concerned referring to scheme 105, together with the further Regulation 80 determination referred to in (4) above. As noted above, the cover letter referred specifically to the use of EFRBS scheme 105. In those circumstances, the s. 8 decision could clearly have been varied so as to include a further contribution to the EFRBS. The county court claim also specified NICs due under an EFRBS for the tax year 2009/10. The March 2010 £600,000 contribution was a contribution under an EFRBS scheme in that tax year, and was indeed a contribution under the same scheme as had been used for the March 2010 £450,000 contribution. The NICs claimed under the settlement in respect of the March 2010 £600,000 contribution therefore undoubtedly arose out of the same or substantially the same facts as in issue on the existing county court claim.

2010/11 – on the basis explained above, namely that the March 2010 £600,000 contribution was properly attributable to the 2009/2010 tax year, we do not understand any further claim to be pursued in relation to the PAYE and NICs settlement for 2010/11.

2011/12 – HMRC issued a Regulation 80 determination in the sum of £65,250 for “Earnings of all employees arising from transactions related to [EFRBS scheme 650]”. The PAYE settlement figure for that year was £1,372,500, referencing contributions for the benefit of Mr Wynne under various different scheme reference numbers, including scheme 650. It appears, however, from Fluid London’s evidence that the settlement figure did indeed relate to contributions made under scheme 650. The Regulation 80 determination figure was therefore capable of being uplifted, on the basis set out above, to the PAYE settlement figure.

2012/13 – HMRC issued a Regulation 80 determination in the sum of £1,178,126.00 for “All employees with earnings arising from transactions related to the [EFRBS scheme 650]”. The PAYE settlement figure for that year was £1,197,000.54, again referencing contributions for the benefit of Mr Wynne under various different scheme reference numbers, including scheme 650. Again, however, it appears from Fluid London’s evidence that the settlement figure did indeed relate to contributions made under scheme 650. The Regulation 80 determination figure was therefore capable of being uplifted, on the basis set out above, to the PAYE settlement figure.