Ark Angel Ltd v The Commissioners for HMRC
Decision date: 4 August 2023
Neutral citation: [2023] UKFTT 705 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned income tax assessments for alleged overclaimed Coronavirus Job Retention Scheme (CJRS) Support Payments by Ark Angel Ltd in respect of two employees. The tribunal found the written employment contracts dated 27 February 2020 genuine, held the employees were not "fixed‑rate" under paragraph 7.6 and so their reference salary is to be calculated under paragraph 7.2, found they were furloughed only from 17 April 2020 and that both worked for connected persons from 1 December 2020, and concluded the Support Payment levels did not breach paragraph 2.5; the tribunal left precise tax calculations to the parties with liberty to apply.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The tribunal’s core holdings include that the conditions in paragraph 7.6 are cumulative (all sub‑conditions must be met for an employee to be a fixed‑rate employee); that the 7.6(b) requirement of entitlement to an "annual salary" imports a degree of contractual permanence rather than merely an annualised equivalent; and that paragraph 6.7 requires a written agreement before an employee can be treated as instructed to cease all work (i.e. furloughed) for CJRS purposes.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The tribunal observed (obiter) that to treat written contractual terms as a sham such that they may be ignored requires evidence of an intention to deceive or to make things appear other than they are, and suggested paragraph 6.8 can be read compatibly with paragraph 6.2 so that training for connected employment may count as work for determining continued employment.