First-tier Tribunal (Tax)

[2011] UKFTT 45 (TC)

TC00922

Appeal number  TC/2009/12646

National Insurance -Statutory Maternity Pay- whether payable –held yes- no evidence of compromise agreement produced

FIRST-TIER TRIBUNAL

TAX

YOUNG’S RECYCLING GROUP LIMITED Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY’S

REVENUE AND CUSTOMS Respondents

and

ANGEL DAY Third Party

TRIBUNAL: B J King (Tribunal Judge)

J E Davison (Lay Member)

Sitting in public in Newcastle on 16 June 2010

The Appellant did not attend, the Third Party did not attend

Lisa Storey, of HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2011

DECISION

1.             In June 2008 the Third Party Mrs Angela Day, who stated that she had been employed as a solicitor with the Appellant company since 2 April 2007 made an application to the Respondents HMRC for a ruling that Statutory Maternity Pay (SMP) was due to her. Her expected date of confinement was 7 August 2008.

2.             In order to qualify for statutory maternity pay, the general rule under the Social Contributions and Benefits Act 1992 s 164(2)(a) is that claimants must have been continuously employed in an employed earnings employment for 26 weeks up to the 15^th week before the expected week of confinement. The Statutory Maternity (General) (Modification and Amendment) Regulations 2000 which came into effect on 4 March 2001 extended the right to SMP to all women, unless they left their job voluntarily ie it removed the requirement that ceasing work had to be “wholly and or partly because of pregnancy or confinement”.

3.             HRRC issued a decision that Statutory Maternity Pay was due to Mrs Day from the start of her Maternity Pay Period, 18 May 2008 and for the following 39 weeks of her Maternity Pay Period ending on 14 February 2009, unless Mrs Day returned to work for the Appellants or started work or returned to work, after the baby was born for an employer who did not employ her during the 15^th week before the baby was due.

4.             The Appellant , through their solicitors Smith and Graham, appealed that decision initially denying that Mrs Day was entitled to SMP and alleging various breaches of contract by Mrs Day, including that she may have left her employment voluntarily before the start of her Maternity Pay Period.

5.             Subsequent correspondence from the Appellants solicitors accepts that Mrs Day was still employed by the Appellants until 15 July 2008. On balance we find that she was still employed until that date.

6.             In December 2008 Mrs Day made a claim to an Employment Tribunal and on 26 June 2009 the Appellants solicitors emailed the Tribunal service to say that a compromise agreement had been reached on 27 May 2009 in the Employment Tribunal proceedings.

7.             On 21 September 2009 Mrs Day told the Tribunal Service that the issue of SMP was resolved but did not say that she had actually been paid any SMP. HMRC would not accept that the issue was resolved as they were not told how much SMP Mrs Day had been paid and whether tax and National Insurance contributions had been paid on it.

8.             On 8 December 2009 HMRC wrote to Smith and Graham asking for confirmation from the Appellant that they will pay National Insurance contributions on the amount of SMP due.

9.              No further evidence has been produced by the Appellant or their solicitors to show that Mrs Day is not entitled to SMP. They appear only to claim that it has been paid- but how much is not disclosed. Mrs Day has not provided any written confirmation that she has now been paid and if so how much. If she has agreed to receive a lesser sum from the Appellants that is a contractual matter between her and the Appellants. Having asked for a ruling from HMRC they were obliged to give such a ruling. The appeal was against that ruling and no evidence was produced to show why a lesser amount was agreed –if that was the case.  

10.          In the absence of any written confirmation that SMP has been paid and that the sum paid has been subject to tax and National Insurance Contributions the ruling remains that SMP is payable for the period from 18 May 2008 to 14 February 2009.

11.          On the day of the hearing an email was sent by the Appellant’s solicitors to the Tribunal Service but this did not reach the Tribunal before the hearing. This email again alleged that the Appellants had paid SMP to Mrs Day but contained no further information as to how much had been paid by the Appellants to Mrs Day. It agrees that tax and National Insurance should be accounted for on the amount paid but does not supply any detail as to what these amounts should be. The email would not have affected our decision had it been received before the hearing. The Appellants have had since May 2009 to produce evidence of the amount agreed and to account for tax and National Insurance contributions due.

12.          This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party.  The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice.

Barbara J King

TRIBUNAL JUDGE

RELEASE DATE: 12 JANUARY 2011