United Kingdom Special Commissioners of Income Tax Decisions

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URL: http://www.bailii.org/uk/cases/UKSPC/2004/SPC00413.html
Cite as: [2004] UKSC SPC00413, [2004] UKSC SPC413

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Woodbury Investments Ltd v HM Inspector of Taxes [2004] UKSC SPC00413 (24 May 2004)

Social Security Contributions and Benefits (Northern Ireland) Act 1992 – Sections 147, 148, 149 – Sick Pay

THE SPECIAL COMMISSIONERS

WOODBURY INVESTMENTS LTD Appellant

- and -

M McKEEVER

(HM INSPECTOR OF TAXES) Respondent

Special Commissioner: MR B M F O'BRIEN

Sitting in Belfast on 23 March 2004

The Appellant did not appear and was not represented

Mr M McKeever, Inspector of Taxes, for the Respondent

DECISION

This was an appeal by Woodbury Investments Ltd ("the Company") against a Notice of Decision made in relation to Statutory Sick Pay ("SSP") under the Social Security Contributions and Benefits (Northern Ireland) Act 1992. The Notice was dated 13 March 2003 and was in these terms:

"1. That [the Company] is liable to pay [SSP] to Mirian Bridge … from

Thursday 26/12/02 to Saturday 8/2/03.

The amount of SSP that [the Company] are liable to pay is £341.55."

The relevant functions under the Act had been transferred to the Inland Revenue and the Decision was accordingly made by an officer of the Board. The Decision was appealed by the Company – by election, to the Special Commissioners, the relevant provisions of the Taxes Management Act 1970 having been made applicable by the transfer of functions Order.

The public revenue has an interest in the matter because the payment of SSP affects, or may affect, entitlement to other Social Security benefits. But to a substantial extent the issue is one between employer and employee. The hearing before me was rendered somewhat unsatisfactory by the fact that neither the Company (by its director, Mr P Higginson, or otherwise) nor Miss Bridge, its former employee, appeared. In those circumstances I could have dealt with the case in a summary manner. However, I asked Mr McKeever (HM Inspector of Taxes) to take me through the relevant legislation and the documentary evidence (which was quite extensive) which had been before the Board's officer at the time when she made the decision under appeal. I took this course partly because the jurisdiction of tax Commissioners in the Social Security field was unfamiliar to me, and partly to give Mr Higginson time to respond to an attempt to contact him, made before the hearing began. It seemed to me that Mr Higginson could not be prejudiced by a late appearance because (in Miss Bridge's absence) I could not have heard any oral evidence before his arrival, and copies of the entirety of the documentary evidence had previously been supplied to the Company by the Inspector.

The material documentary evidence comprised:

(a) PAYE records prepared by the Company, in the hands of the Revenue;

(b) Form SSP1, Section 1 of which was completed on behalf of the Company and stated the grounds upon which SSP had not been paid; and Section 2 of which was completed by Miss Bridge and set out the facts which would entitle her to SSP;

(c) Form SSP 14, Miss Bridge's application for a Decision;

(d) Form SSP 50, the Company's response to ( c); and

(e) Doctor's Statement.

The liability to pay SSP arises under Section 147(1) of the 1992 Act:

"Where an employee has a day of incapacity for work in relation to his contract of service with an employer, that employer shall, if the conditions set out in sections 148 to 150 below are satisfied, be liable to make him … a payment … in respect of that day."

I do not propose to go into the facts save to the extent that they have direct relevance to the conditions referred to in s.147(1).

Miss Bridge's accident occurred on 26 December 2002 and the doctor advised her that she should refrain from work until 8 February 2003. The doctor's advice was not effectively challenged. All the days between those dates accordingly satisfy the condition in s.148.

Miss Bridge's contract of employment did not require her to work on Fridays or Saturdays. In calculating the amount of SSP due only Sundays to Thursdays (inclusive) ("qualifying days") have been taken into account. Thus the condition in s.150 is satisfied.

The last condition (s.149) requires each qualifying day to fall within (in the circumstances of this case) a period ending with the earlier of (i) the end of the employee's incapacity for work (viz, 8 February 2003) and (ii) the end of the contract of service.

Miss Bridge started working for the Company in November 2000, and whatever may have been in the contemplation of the parties at that time as to the likely duration of the employment, it is clear that by Christmas 2002 the contract was an ordinary weekly one (or perhaps fortnightly, as Miss Bridge was paid fortnightly), without any specific limit of time. There is nothing in the documentary evidence to indicate that either party took any step to terminate the contract before (at the earliest) 6 February 2003. In particular, I see no basis for any suggestion that Miss Bridge's contract of employment terminated on Christmas Eve 2002 (before her accident occurred), although that day proved, in the event, to be the last day on which she actually worked for the Company.

It is common ground that the contract of employment had terminated by the end of February 2003. There is, however, something of a conflict, on the documents, as to the exact date. On the one hand, Form SSP 50 records a telephone conversation between Mr Higginson and Miss Bridge on 6 February during which Miss Bridge allegedly indicated in no uncertain (not to say lurid) terms that she had no intention of returning to work for the Company. On the other hand, the PAYE Form P45, prepared by or for the Company, states the leaving date as 18 February (and Miss Bridge's tax for the year to date was calculated consistently with that date). In the absence of evidence to resolve the conflict there is no basis on which to fault para 1 of the Decision insofar as it treats the third condition as satisfied with the relevant period ending with the end of Miss Bridge's incapacity for work. I am bound to say that had I had the benefit of oral testimony I might very well have found that the contract came to an end on 6 February; and had I done so, I would have varied para 1 of the Decision by substituting 'Thursday 6/2/03' for 'Saturday 8/2/03'. As it happens, such a variation would not have affected the figure of £341.55 in para 2 of the Decision because 7 and 8 February fell on a Friday and Saturday and were accordingly not counted as days in respect of which SSP was due.

The total number of qualifying days is 30. No SSP in payable in respect of the first three (s.151(1)). £341.55 correctly represents 27 days at the prescribed daily rate.

I will only add that Miss Bridge was slow in obtaining medical evidence of her injury, and even slower in presenting it to the Company; and I can understand the Company's initial reluctance to pay SSP. But the Company's appeal against the Decision, or at least its persistence with that appeal, appears to have been pointless. Belatedly, Mr Higginson may have recognised that.

The Company's appeal is dismissed and the Decision of 13 March 2003 is upheld.

B M F O'BRIEN

SPECIAL COMMISSIONER

SC 3081/03