Loan Write-Offs

I saw Roger Jones' interesting article on this topic Taxation 7 October 2004 page 22 but I think he might be a bit gloomy about the prospects of challenging the Inland Revenue's approach.

Recently I had a case involving this point involving very large sums of money.

We argued that the wording of Social Security Contributions and Benefits Act 1992 s 3 ('derived from an employment') imposed a capacity test similar to that in the old TA 1988 s 19 on which there is much authority and that although in the case of an employee loan write off an NIC charge would follow as a matter of statutory linkage that linkage was absent when TA 1988 s 421 supervened and the IR had to establish a charge under s 3 on its own terms. 

We argued that: 

• Companies Act 1985...