The appellant company (FML) established a funded unapproved retirement benefits scheme. FML made an initial cash contribution to the scheme of £1,000, and also transferred Treasury stock with a nominal value of £162,000, both for the benefit of M, a director and shareholder of FML. M was the only scheme member.
The Supreme Court had to consider whether the transfer of the cash and Treasury stock to the scheme was a payment of earnings to or for the benefit of M for National Insurance contributions (NIC) purposes, within SSCBA 1992, s 6(1). It was argued for FML that a payment of ‘earnings’ (within s 6(1)) did not extend to the employer's transfer to a trust of funds or assets in which the earner had, at the time of the transfer, only a contingent interest.
HMRC argued (among other things) that the payment into the trust fund was earnings because it was paid as the quid pro quo
