UKFTT 95 (2009) PA Holdings Ltd & Another v HMRC

Conditional share award planning - HMRC won 

Case Summary: 

Following a PAYE and NIC planning arrangement employees entitled to bonuses received dividends in a company specially set up for the purpose. The Tribunal decided that the payments were emoluments from the employment with PA Holdings Ltd. As dividends were indeed paid these dividends were also taxable Schedule F. But income can only be taxed once. Schedule F took priority over Schedule E and the payments were to be taxed as dividends. HMRC could not get PAYE on the payments.

NICs were however due on the payments as they were earnings from the employment.