Tax and deductions from pay

New and updated

• Date:

  25 February 2005

  Type:

  Employment law cases

  Deductions from wages: Failure to pay declared bonus was unlawful deduction

  In Farrell Matthews & Weir v Hansen, the EAT holds that a non-contractual bonus that had been declared constituted wages under s.27(3) of the Employment Rights Act 1996. The employer's failure to pay it therefore amounted to an unlawful deduction from wages.

• Type:

  How to

  How to recoup training costs from an employee who leaves

  Practical guidance on recouping training costs from an employee who leaves, including obtaining express written agreement in advance; a sliding scale for recovery; and deductions from wages.

• Date:

  14 January 2005

  Type:

  Employment law cases

  Compromise payment not taxable

  The Court of Appeal has upheld the decision of the High Court in Wilson (HM Inspector of Taxes) v Clayton that a payment from an employer under a compromise agreement should be treated as a termination payment under s.403 of the Income (Earnings and Pensions) Act 2003.

• Type:

  Contract clauses

  Deductions from wages contract clause

  A model contract clause to allow deductions to be made from an employee's pay.

• Type:

  Policies and procedures

  Deductions from wages for unauthorised absence contract clause

  A model contract clause setting out terms relating to deductions from salary for unauthorised absence.

• Type:

  Letters and forms

  Deductions from wages authorisation form

  A model form for an employee to authorise your organisation to make deductions from their wages.

• Date:

  31 December 2004

  Type:

  Employment law cases

  Usetech Ltd v Young (Inspector of Taxes)

  In Usetech Ltd v Young (Inspector of Taxes) [2004] EWHC 2248 HC, the High Court found that where an individual provided his services through his own service company and an agency all the contracts were subsumed into one. The relevant terms identified and transferred to the notional contract between the individual and the hirer were consistent with those of an employment contract.

• Date:

  31 December 2004

  Type:

  Employment law cases

  Guthrie v Scottish Courage Ltd

  In Guthrie v Scottish Courage Ltd [2004] All ER (D) 15 (Jun) EAT, the Employment Appeal Tribunal upheld a tribunal chair's decision that the employer had made an unlawful deduction from wages when it withheld company sick pay because it had reached a perverse conclusion that the employee's illness was not genuine.

• Date:

  10 January 2003

  Type:

  Employment law cases

  Illegal contracts: Employee's participation in tax fraud rendered contract illegal

  In Soteriou v Ultrachem, Solvo Ltd and Ultracolour Ltd, the EAT upholds an employment tribunal's decision that an employee's knowing and active participation in the deception of the tax authorities as to his employment status was primarily for his own benefit.

• Date:

  22 July 2002

  Type:

  Employment law cases

  Contractual sick pay: Contractual clause withholding sick pay for misconduct had no effect

  An employer was not entitled to withhold sick pay from an employee who took sick leave because of anxiety and depression immediately after being disciplined for misconduct, notwithstanding a contractual clause excluding such entitlement where sickness was "due, or attributable, to his own misconduct", the EAT holds in Manchester City Council v Thurston.