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Lauren   April 12th, 2021   Uncategorized No Comments

In the case of NVCS Limited/1, the Commissioners for HMRC and (2) Dare the First Tier Tax Tribunal had to consider whether Ms. Dare could have waived her entitled MPS in a “complete and final” comparison, without specifying the amounts they paid for her PMS. This decision highlights the need for employers to be careful in paying SMP as part of a transaction agreement. If the agreement does not explicitly mention it, employers may face unexpected payment requests from HMRC. Workers with rights against their employer can pay these rights through a transaction contract or a COT3. A COT3 is very similar to a transaction agreement, but it is used where ACAS helped reconcile the application. Campus Living Villages UK v. HMRC and Sexton is a reminder to employers that if a statutory maternity payment (SMP) is included in a transaction contract, it must be made clear. As a result, it was found that Ms. Dare had not been paid under the COT3 agreement and that this was due to her in addition to the $10,000 in compensation she had already received. A pregnant employee was fired.

She called for unjustified release and termination of pregnancy. After the conciliation, she reached a D`Acas agreement with her employer – a legally binding agreement to settle her complaint. This was recorded on the COT3 form of Aca. HMRC found that Ms. Sexton was entitled to an SMP payment and that the allocation of the “right to maternity allowance” in the transaction agreement was not SMP, as it did not explicitly refer to SMP. In addition, tax and social contributions should have been deducted if the employer wanted to pay SMP, and not this. When negotiating a transaction agreement, it is important to take care of this too: the recent case of NVCS Ltd -v- (1) Commissioners for HMRC (2) Mrs Dare (NVCS) reminds us that this is not the case and that you cannot enter into a binding agreement which claims to “fully and definitively settle” a right to the statutory maternity allowance (SMP), unless you have actually paid her SMP to the worker. Ms. Dare worked for NVCS. She took her job in February 2016 and in July 2016 informed the company that she was pregnant and was going to take maternity leave. Soon after, there was an argument about his show.

A phase of negotiations with ACAS followed, which resulted in an agreement. Under the terms of the transaction, Ms. Dare received $10,000 as a “full and final settlement of all claims” against NVCS. After receiving the funds, Ms. Dare turned to NVCS to request payment for her PMS. NVCS objected on the basis that its SMP claim of approximately $8,000 had been included in the overall settlement amount of $10,000.

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