The Upper Tribunal’s confirmation in the Martin case that relief is available for bonus clawbacks is welcome, but that relief is limited. Andrew Roycroft (Norton Rose Fulbright) analyses the decision.
The Upper Tribunal has confirmed Julian Martin’s entitlement to income tax relief for that part of a retention bonus which he subsequently had to repay to his employer (HMRC v Julian Martin [2014] UKUT 0429 reported in Tax Journal 3 October 2014). Were it not for the fact that bonuses remain a sensitive political issue this might be seen as uncontroversial as it brings Mr Martin’s tax position more closely into line with his actual remuneration from his employment with JLT.
An important aspect of the decision is how limited the relief is....
