HMRC v PA Holdings Ltd (and cross-appeal)

The Court of Appeal has unanimously allowed HMRC’s appeal in HMRC v PA Holdings Ltd (and cross-appeal) (CA – 30 November). For 2000/01 to 2002/03 a company (P) entered into complex arrangements under which it paid certain employees bonuses in the form of dividends which were financed from a capital contribution to P from employee benefit funds which in turn were derived from P. HMRC imposed determinations under Income Tax (PAYE) Regulations SI 2003/2682 reg 80. P and one of its employees appealed contending that the income was chargeable to income tax under Schedule F and could not also be subjected to PAYE or charged to national insurance contributions. The Court of Appeal unanimously rejected this contention and upheld the determinations. Moses LJ held that the Court ‘should focus on the character of the receipt in the hands of the recipients’....