Kuehne & Nagel Drinks Logistics Ltd v HMRC (and related appeals)

In Kuehne & Nagel Drinks Logistics Ltd v HMRC (and related appeals) (Upper Tribunal – 22 December) a company (S) carried on a drinks distribution business. In 2006 it transferred that business to another company (K). The transfer fell within the Transfer of Undertakings (Protection of Employment) Regulations 2006. Some of the employees were concerned because K’s pension scheme appeared to be less generous than S’s pension scheme. Following negotiations K made lump sum payments to the transferring employees. HMRC issued a ruling that K was liable to pay national insurance contributions on these payments and amended the employees’ returns on the basis that they were chargeable to income tax. K and the employees appealed. The First-Tier Tribunal dismissed the appeals and the Upper Tribunal upheld this decision. Newey J held that the payments were within the definition of ‘emoluments’...