You can’t park here: they’ll tax you for it…
The recent case of Yum Yum Ltd v. HMRC
confirms that where a car is made available to an
employee, for example in a car pool
scheme, it is exempt as a taxable employment benefit provided the
car is kept overnight at a premises
“occupied” by the employer.
It follows that it would
constitute a taxable employment
benefit if the car was stored
overnight at an employee’s home.
This was the first time a first-tier
tribunal considered the meaning of
premises being “occupied” for the
purposes of the pool car exemption
in section 167 of the Income Tax
(Earnings and Pensions) Act 2003.
Chapter 6, Part 3, of ITEPA
2003 prescribes that where a car is
made available to an employee, this
can constitute a taxable employment
benefit. The car pool exemption may apply where
the car is not being made available for private use,
which is dependent on where the car is kept
overnight.
It can only apply if the car is not kept overnight
at any residential premises where any of the
employees reside, unless the premises are “occupied”
by the employer.
The Tribunal found that there was no definition of the term “occupation” under ITEPA 2003. The
Tribunal held that a person “occupies” a premises
when “he physically possesses them, controls them, has power to exclude others (by
trespass action) from the benefit he
enjoys in them and has some form
of right to some enjoyment of
them”.
In this case, the employer could
not show that it, rather than its
director who used the car, occupied
the director’s home, where the car
was parked. Therefore, the pool car
exemption could not apply.
Model employee exposed by
Facebook
Gill v. SAS Ground Services UK
Ltd confirms that employers are
able to use posts on social
networking websites such as Facebook and YouTube as evidence in
disciplinary proceedings.
Ms Gill worked for SAS Ground Services. In her
spare time she pursued acting and modelling. She
created a Facebook page on which she uploaded
regular updates relating to her acting and modelling
pursuits.
She was signed off sick but during the sick leave
one of Gill’s colleagues saw and printed out an entry
from her Facebook page which found its way to her
managers. The Facebook page showed that during
the sick leave she had attended London Fashion
Week.
The company investigated Gill’s actions and began disciplinary proceedings. At the disciplinary
hearing, Ms Gill explained her attendance at London
Fashion Week was “essentially social” despite
comments on her Facebook page indicating
otherwise.
Furthermore, there was also a YouTube video of
an event at the fashion week, which showed Gill on
the catwalk. It transpired that Gill had also, during a
previous period of unauthorised absence, been
filming in India.
Her employers considered that Ms Gill’s
involvement at the fashion events was not
“essentially social” and also considered the
demoralising effect that Ms Gill’s actions had on her
colleagues, who were aware that she was attending
London Fashion Week whilst receiving full sick pay.
Her employers, therefore, dismissed Ms Gill for
gross misconduct. Ms Gill did not appeal the
decision, but lodged a claim for unfair dismissal.
The ET considered that Ms Gill’s claim was
brought without merit and held that the company
had followed a fair procedure and were entitled to
reach the conclusions it did based on the evidence
they had gathered.
Equality Act provisions in force
On 8th April 2010 the Equality Act 2010 received
Royal Assent. ThisAct consolidated current
legislation and harmonised aspects of discrimination
law. The Government Equalities Office subsequently
published a list of provisions from the Act which
came into force from 1st October 2010. This first
stage of implementation brought into force the
majority of the Act.
Employers should review their employment policies and procedures to ensure they are compliant with the provisions of the Act.
Employer’s ability to pay
In Tao Herbs & Acupuncture Ltd v. Mrs Y. Jin, an
Employment Tribunal upheld a claim by Mrs Jin that
she had been unfairly dismissed for the assertion of
a statutory right and awarded her £11,000.
The amount of the award was appealed by the
employer who argued that its ability to pay should be
taken into account. The Employment Appeals
Tribunal disagreed.
It held that the compensatory award relates to
what is just and equitable in all the circumstances
having regard to the loss sustained by the employee
because of the action taken by the employer. The
employer’s ability to pay an award is not a relevant
consideration.
If there is a strong chance of liability, then it
may be better to negotiate a settlement at an early
stage which may include the ability to agree staged
payments in relation to any compensation.
Age Discrimination for seeking “younger”
replacement
A recent case in the Employment Appeal Tribunal
highlights that careful wording must be used during
recruitment to avoid possible discrimination.
Mr Beck was employed as head of marketing by
a Canadian Bank. The bank dismissed Mr Beck,
aged 42, on the grounds of redundancy.
Following his dismissal, the bank instructed an
employment agency to recruit a replacement for Mr
Beck. In the person specification it stated that the
bank wished to recruit a “younger” individual. The bank’s head of HR disagreed with the wording.
The Tribunal concluded that Mr Beck’s
redundancy was a sham and his dismissal unfair.
In addition, it held that he had been discriminated
against on the grounds of age. The Bank
appealed. The Employment Appeals Tribunal in
dismissing this appeal held that use of the word “younger” in the person specification constituted
the “clearest possible evidence of potential age
discrimination”.
This is a useful reminder that employers should
carefully consider internal documents such as job
specifications, as well as the wording of
advertisements.
