Employment Tax Expert

Sounds quite simple really in the general scheme of things – what is the date of someone’s termination of employment? Unfortunately, in the current economic climate it is important that employers are aware of the following decision by the Supreme Court:

In the case of Gisada Syf –v- Barratt, Mrs Syf was dismissed in a letter which was delivered by recorded delivery and signed for by her son on 30 November 2006. She was fully expecting the decision letter to arrive at that time but had to be away for a few days as her sister was giving birth. She did not open the letter and therefore learnt of her dismissal when she returned on 4 December 2006.
The time limit for presenting a claim of unfair dismissal is three months from the effective date of dismissal. She presented an unfair dismissal claim on 2 March 2007 and her employer contended that she had brought the claim out of time as they argued her effective date of dismissal was 30 November 2006 and, as such, her claim should have been submitted on 1 March 2007.
She alleged the effective date of termination was 4 December 2006 and, as such, the claim submitted on 2 March 2007 was “in time”.

The Supreme Court decided that the effective date of termination was 4 December 2006 was when she actually read the dismissal letter. They said she had not deliberately failed to open the letter or gone away to avoid reading it so had not purposefully delayed. As a result 4 December 2006 was the first time she was legitimately able to read the decision to dismiss her and this therefore amounted to her effective date of termination.

So the moral of the story is that employers should consider informing employees verbally (please not text!) and then following up with a letter

Termination of employment, redundancy scenarios are all very difficult times for both employers and employees especially in the current climate but trust various sections of HMRC to make it even worse. Yes, HMRC are attacking the very payments that are supposed to ease the stress and trauma of someone losing their job, so care needs to be taken. As always this employment tax expert wants to remind employers that all payments on termination of employment could have not just legal but tax consequences so get advice as early as possible because HMRC are just waiting in the shadows. There latest favourite topic is “auto PILONS” or automatic pay in lieu of notice. Here they are not looking at what is a contractual term but instead a non contractual term, what most of us would regard as damages for breach of contract. HMRC are updating their favourite “custom and practice” point and you need to make sure that not only do you get this right from now onwards but if a letter arrives on your doorstep arguing that a payment is an auto PILON you need to get advice from an employment tax expert asap, as this has serious implications both now and for potential future redundancies etc

I was talking to a VAT colleague of mine who was commiserating with me about the fact that the Inland Revenue have got “all these new powers” and the fact that Customs have had them for years. The reason for this empathy – they knew that it had taken sometime for things to settle down, cases to be tested etc in relation to over exuberant (let’s be generous, it’s Wednesday!) officers, well be warned here we go again in relation to the Inland Revenue.

It is important that tax payers and advisors are not simply intimidated when faced with what amounts to threatening behaviour by compliance officers – this employment tax expert for one would like to hear your experiences of the new regime. Put in simple language the top brass at the Revenue are quite frankly bricking it, in relation to what may occur in the first 12 -18 mths – they are anticipating problems but what have they done to reign these people in – very little at ground level. Some are already running around threatening people with formal action even when they have no legal obligation to provide information – don’t get me wrong, we are not talking about offshore accounts and banks these are people who are not under review. One case brought to our attention this week was where individuals have already provided a response, regarding contractual terms of engagement, but the compliance officer doesn’t like the answer – ie it does not agree with their opinion, as it yields no money, so they are now threatening these people – well guess what we’re not standing for this and we urge all our readers to be aware of this sort of abuse of power and get in touch – if we don’t bring these people to account no one will – you have been warned!

Cricket at it’s very best, edge of the seat stuff – Collingwood you were magnificent – true northern fighting spirit, together with Jimmy and Monty, whilst not forgetting how many times Swann was hit (I thought it was illegal in this country to hurt a swan!) this was true grit. However if you’ve read my earlier blogs you’ll see my view on Ponting’s captaincy, under pressure. Imagine numbers 10 & 11 in and you decide to “blast” them out with the part time bowler that is Marcus North – Pleeeese!!! or should that be thank you!

After the match there is talk of compliance procedures, spirit of the game – from Ponting and the Aussies – kettle pot black comes to mind – these were the guys that invented “sledging” – the practice of sarcastic, usually very personal comments about the batsman, his family etc within earshot of the batsman by the fielding side – so don’t come the big high and mighty with us – just admit you got it wrong.

Anyway, after Monty’s batting heroics, courtesy of his “batting buddy” Collingwood, he will be dropped from the next test as his bowling wasn’t good enough. Does this entitle him to compensation for loss of office or has he merely been put on garden leave – all have very different tax interpretations and advice should always be sought otherwise an Inland Revenue tax investigation, or employer compliance review will leave you crying into your beer or is that a nice glass of Chardonnay.

If you are facing decisions regarding termination of employment, redundancy, pay in lieu of notice or the like contact the employment tax expert

At long last the preening Portuguese international has been allowed to go to Real Madrid for a mere £80 million. The red side of Manchester have stated that matters will all be sorted out by 30 June, so who have they been deceiving, their “loyal” fans all with manucunian accents, of course because this was a deal done last year with Ronaldo petulantly having to agree to stay another year at the Lancastrian club. So what was in it for him, compensation for loss of office, pay in lieu of notice, tax free payments on termination - you bet there will be all rapped up as loyalty bonuses. Now call me old fashioned but loyalty in football seems to be a complete enigma these days. I remember the case of Alan Smith that passionate, Leeds born and bred player who was in tears when they were relegated, kissed the badge and swore blind he would never join Leeds United’s sworn enemies, scum, but off he trotted to pick up his signing on payments etc – loyalty in football is dead!