The Court of Appeal’s decision brings refreshed simplicity to a tortured area of the law, write Joshua Carey and Sam Way (Devereux Chambers).
In HMRC v Murphy [2022] EWCA Civ 1112 the Court of Appeal overturned the Upper Tribunal’s decision that the profit received by a taxpayer under a settlement agreement was reduced by the sums that he had paid away to his legal representatives and legal expenses insurer and hence that only the net profit under the settlement agreement was brought within the scope of the charge to employment income under Part 2 of ITEPA 2003. The Court of Appeal confirmed that ‘profit’ within ITEPA 2003 s 62(2)(b) means the gross profit received by an employee and that the only deductions which can be made from that sum are those allowed under the allowable deductions listed in ITEPA 2003 s 327.
Background
Mr Murphy had been...
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The Court of Appeal’s decision brings refreshed simplicity to a tortured area of the law, write Joshua Carey and Sam Way (Devereux Chambers).
In HMRC v Murphy [2022] EWCA Civ 1112 the Court of Appeal overturned the Upper Tribunal’s decision that the profit received by a taxpayer under a settlement agreement was reduced by the sums that he had paid away to his legal representatives and legal expenses insurer and hence that only the net profit under the settlement agreement was brought within the scope of the charge to employment income under Part 2 of ITEPA 2003. The Court of Appeal confirmed that ‘profit’ within ITEPA 2003 s 62(2)(b) means the gross profit received by an employee and that the only deductions which can be made from that sum are those allowed under the allowable deductions listed in ITEPA 2003 s 327.
Background
Mr Murphy had been...
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