On appeal from: [2012] EWCA Civ 692.

Concerns liability to pay National Insurance Contributions (NICs) and, in particular, the interpretation of “earnings” in the Social Security Contributions and Benefits Act 1992, s 6(1). The Court examined the legislative history behind the UK’s system of national insurance, which showed that NICs have indeed been levied on a basis that is different from the “emoluments” on which income tax has been raised. Significant that Parliament, in the National Insurance Act 1946, chose to use the word “earnings” rather than “emoluments”. The latter word has been interpreted by the courts as referring to actual money payments and benefits in kind capable of being turned into money by the recipient. Inter alia, HMRC’s view could only be sustained by looking exclusively at what was paid and ignoring what the earner received. Such an interpretation denudes the word “earnings” of any meaning, so the phrase “earnings are paid” would amount to “payments are made”.

For judgment, please download: [2014] UKSC 14
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