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The taxpayer a close company created an employee benefit trust in October 2002. Contributions totalling £265 000 were made during October and November that year.
The amounts were paid to the trustees and shown as an accrual in the taxpayer’s accounts for the year to 30 September 2002. HMRC disputed the company’s right to charge the £265 000 against profits.
The taxpayer said the sum was a payment that fell outside FA 1989 s 43. It argued that the trustees were not an intermediary for the purpose of s 43.
The First-tier Tribunal said the word intermediary was normally associated with some form of agency but it did not have to preclude trustees on the basis they had to act impartially in exercising their fiduciary duties as trustees.
The tribunal ruled there could be two types of intermediary: one that acted as an agent often for...
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