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The taxpayer entered into an agreement with Hays to work at Merrill Lynch for a specific period. He was to be treated as working under a contract with Hays, and was not an employee of Merrill Lynch.
Hays operated PAYE on his earnings. The taxpayer however claimed he was employed by Merrill Lynch, from which he was made redundant and paid £30,000.
HMRC said that the taxpayer was employed by Hays, that the lump sum was a bonus paid in accordance with his contract and was fully taxable.
The First-tier Tribunal found that the taxpayer was employed by Hays at the relevant time and could not therefore have been made redundant by Merrill Lynch.
The taxpayer had a fixed term contract which provided for a bonus of £30,000 in specific circumstances. This was duly paid and was liable to tax.
The taxpayer’s appeal was dismissed.
