The appellant, a trade union, came into being in 2004 as an amalgamation of small trade unions. It was divided into regions, each with several branches, run by a branch secretary with support from a committee. The branch secretaries received payments in the form of honoraria, part of which represented the reimbursement of expenses, and part was a ‘profit’ element.

Evidence was given before the First-tier Tribunal (FTT) that there had been an understanding in place between the appellant (and predecessors) since at least 1981 about the handling of the honoraria. For income tax purposes, there was an agreement that the honoraria should be paid gross and that each branch secretary should declare the payment to the Inland Revenue (as was) each year. The appellant provided an annual list of the branch secretaries and the payments made to them. In 1997, one of the appellant’s predecessor unions and