The case of White v Inland Revenue Commissioners (SpC357) illustrates the importance of:
Jonathan White joined the Royal Ulster Constabulary on 4
September 1994. Prior to joining the Northern Ireland Police
Authority had provided him with promotional material and a summary
of his conditions of service. Both documents referred to the
availability of a “housing allowance” that was paid
when accommodation could not be provided. On 1 September 1994 the
housing allowance was abolished. Police officers in post before
that date were paid a “Replacement Allowance” at the
same rate as the housing allowance.
Mr White discovered that was not entitled to either housing
or replacement allowance. A number of police officers were
similarly disadvantaged. The Police Federation, who represented the
officers, selected a test case. Before the case could be heard by
the courts a negotiated settlement was reached. The Police
Authority agreed to make ex-gratia payments of housing allowance
(replacement allowance) from 1 September 1994 as if the Constables
had first been employed on 31 August 1994.
In August/September 1997 Mr White received payment. This sum
included awards attributable to 1995-96 and 1996-97. He claimed
that the sums attributable to the earlier years should be assessed
in those years and not included in his self-assessment for 1997-98.
It was accepted that the housing or replacement allowance
were earnings from the employment. The dispute was only about the
timing of the charge to income tax. Whether, under Rule 2 of
Section 18 ITEPA 2003 entitlement arose in 1995-96 and 1996-97 or
in 1997- 98.
The Special Commissioner decided that Constable White was
not entitled to receive payments of allowances in 1995-96 and
1996-97. Even though the aggregated award was calculated in terms
of amounts due for those years he was not entitled to receive
payment until 1997 when the Police Authority decided to accept the
Federation’s claim.
The Special Commissioner commented on Section 202B(1)(b)
ICTA 1988 (Rule 2 Section 18 ITEPA 2003). In his view the
assessability of earnings for any particular year of assessment
must be capable of being judged at the time, not later than
immediately after the year in question. In this case the appellant
could not demonstrate his entitlement to payment for earlier years
on the 6 April following each year. As noted above, entitlement did
not arise until the Police Authority agreed to make the awards.
This decision in this case is based on the same view of the law taken in respect of police officers who have to resign for disciplinary reasons but are later re-instated following a successful appeal. See EIM68180. In contrast, compare the time when entitlement to arrears of pay arises when claims are made under Equal Pay legislation. See EIM42290 and EIM02530.
