Commissioners for His Majesty’s Revenue and Customs (Appellant) v M R Currell Limited (Respondent)

Case summary

Case ID

UKSC/2026/0083

Parties

Appellant(s)

THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS

Respondent(s)

MR Currell Ltd

Issue

Did money paid by the respondent company into an employee benefit trust, and then loaned by the trustee to a director of the company, fall within the definition of ‘earnings’ for the purposes of section 62(2) Income Tax (Earnings and Pensions) Act 2003?

Facts

The appellant in this case is a Company which operates as a painting and decorating business, and which was originally established by Mr Currell in the 1980s. Mr Currell was joined as a partner in the business at a relatively early stage by his wife, Mrs Kimberley Currell. Their business grew and was incorporated in 2002. It has achieved substantial success. Mr and Mrs Currell are both directors of the Company. Their two sons are also involved in the business. By November 2010, the shareholdings in the Company were approximately 31% each held by Mr and Mrs Currell, 5% held by each son and 28% held by a share incentive plan. Mr Currell took very modest amounts by way of salary (under £5000 annually between 2009 and 2011). The Company paid dividends to its shareholders, generally totalling around £60,000-£80,000 annually. Mr Currell also received income from other investments. This appeal is concerned with the tax treatment of £800,000 paid to an Employee Benefit Trust (“EBT”) established by the Company, and loaned to Mr Currell in 2010. In November 2010, the Company established the EBT. The EBT had an independent corporate trustee. The Company paid £800,000 to the Trustee (“the Payment”). At or about the same time, the trustee made a loan (“the Loan”) of the £800,000 to Mr Currell. The Loan had a five-year term and was interest free, unless Mr Currell became a ‘bad leaver’. Mr Currell had the option to prepay the loan, but the trustee could not require repayment prior to the maturity date except in certain circumstances (which included Mr Currell’s insolvency or cessation of employment). Mr Currell used the funds to purchase shares in the Company from Mrs Currell. Mrs Currell then lent the funds back to the Company. Mrs Currell was free to call for repayment as and when she wished. These steps were all ‘prewired’ at the time that the Company made the Payment to the EBT. The question in this appeal is whether the Payment or the Loan is subject to income tax and National Insurance contributions as “earnings” within the scope of section 62(2) of the Income Tax (Earnings and Pensions) Act 2003 and section 3(1) of the Social Security Contributions and Benefits Act 1992. The First-tier Tribunal held that that HMRC had correctly determined that the Company was liable to pay income tax and NICs in relation to the Payment. The Upper Tribunal overturned the First-tier Tribunal’s decision, and held that the Payment should not be subject to income tax and NICs. The Court of Appeal dismissed HMRC’s appeal against that decision. HMRC now appeals to the Supreme Court.

Date of issue

17 June 2026

Case origin

PTA

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