Employment Income Manual

EIM00820 - Employment income: negative taxable earnings

Net taxable earnings

Section 11(1) states that the 바카라 사이트渘et taxable earnings바카라 사이트� is given by the formula:

TE - DE

For the purposes of that formula:

바카라 사이트楾E바카라 사이트� means the total amount of any taxable earnings from the employment in the tax year

바카라 사이트楧E바카라 사이트� means the total amount of any deductions allowed from those earnings under the provisions listed at section 327(3) to (5).

In HMRC v Julian Martin, Judge Warren said:

바카라 사이트淚t is not difficult to see conceptually how TE-DE might be negative. Where that is the case, 바카라 사이트榥et taxable earnings바카라 사이트� are to be taken to be nil. What is not so easy to see is how TE by itself might be negative. There is no definition in ITEPA or elsewhere of what it is for TE to be negative.바카라 사이트�

Negative taxable earnings

The phrase 바카라 사이트渘egative taxable earnings바카라 사이트� does not appear in the legislation. Judge Warren construed it to refer to 바카라 사이트渁n item (typically a payment by an employee to his employer) which is brought into account in computing the total amount of earnings within the definition of TE and which reduces the amount of TE from what it would otherwise have been.바카라 사이트�

The meaning of 바카라 사이트渆arnings바카라 사이트� is explained by section 62 (see EIM00520). The ordinary concept is of something moving from employer (or sometimes a third party) to employee. It is difficult to conceive of how there could be a negative amount arising under the specific descriptions stated in section 62. However, section 11(3) envisages the possibility of TE being negative. Judge Warren reconciled this by saying:

바카라 사이트淛ust as positive taxable earnings represent positive general earnings of the employee for a relevant tax year, so too negative taxable earnings must, in my view, envisage payments which are made (rather than received) by the employee for the relevant tax year. I will refer to such payments as negative general earnings.바카라 사이트�

However, he qualified that with the comment:

바카라 사이트淭here is no explanation in the legislation of what it means for TE to be negative or of what items of expenditure by an employee could be brought into account in making a determination of TE. In my terminology, there is no explanation of the concept of what could amount to negative general earnings or negative taxable earnings.바카라 사이트�