Premiums on insurance policies paid by employer

M was the sole director and shareholder of MMCL. The employer paid the premiums on insurance policies for M. HMRC said tax and National Insurance was due on the payments and issued assessments. The taxpayers appealed saying the policies should have been taken out in the name of the company and when they realised they were not the policies were assigned from M to MMCL. 

The First-tier Tribunal dismissed the appeals saying the payments were earnings from M’s employment. 

MMCL and M appealed.

The Upper Tribunal said the central issue was whether the transactions conferred a profit or benefit on M that had derived ‘from’ his employment with MMCL. An amount was taxable as ‘general earnings’ only if it was ‘from’ an office or employment (ITEPA 2003 s 6 s 7 s 9 and s 62). In this case the premiums were ‘very clearly not earnings...