Tribunal Upholds HMRC Assessments in CJRS Case Over Director's Remuneration Interpretation

Citation: [2024] UKFTT 11 (TC)
Judgment on


The case of Bandstream Media and Corporate Communications Limited v The Commissioners for HMRC pertains to an appeal against assessments under the Coronavirus Job Retention Scheme (CJRS). The case involved interpretation of the relevant legal provisions for determining the basis on which support payments under the CJRS are calculated for a director’s remuneration before and after 19 March 2020.

Key Facts

In this case, Bandstream Media and Corporate Communications Limited appealed against the HM Revenue and Customs (HMRC) assessments of coronavirus support payments claimed under the CJRS for Mr. Graham Smith, an employee and director of the appellant. Prior to 19 March 2020, Mr. Smith received a monthly salary of £600, supplemented by dividends of £2,500. After watching a parliamentary debate, Mr. John Tann, the appellant’s accountant, sensibly advised that Mr. Smith’s salary be increased to £2,500 per month to “replace” the dividends, thereby increasing the eligible amount for support payments under the CJRS to 80% of the revised salary.

The tribunal’s decision centered around the interpretation of the First Coronavirus Direction, particularly paragraphs 7.1(b)(ii), 7.12, 7.1, and 7.2. The core legal questions hinged upon:

  1. What constitutes “regular salary or wages” for the purposes of determining CJRS payments.
  2. The applicability of paragraph 7.12, which addresses circumstances where an original salary is topped up.

The tribunal relied on a literal and purposive interpretation of the legislation, focusing on the intent behind CJRS provisions and the regularity of remuneration. It was held that Mr. Smith’s reference salary for CJRS claims was the salary submitted in the RTI return before 19 March 2020. Any amendments to the salary structure post this date (i.e., increased salary in lieu of dividends) could not retrospectively affect the reference salary for the CJRS claims. The tribunal found that paragraph 7.12 did not permit modifications to an employee’s salary for calculating CJRS support payments after the introduction of the scheme.


The tribunal determined that the CJRS claims should have been based on the original £600 monthly salary, aligned with RTI information before 19 March 2020, rejecting the increased salary as the basis for the claims. As a result, the assessments made by HMRC were upheld, and the appeal was dismissed. The tribunal clarified that it could not entertain arguments related to HMRC’s adherence to its Charter, use of care and management powers, or notions of fairness as they were outside its jurisdiction.


The tribunal’s analysis reaffirms that for CJRS claims, an employee’s salary must be gauged as the amount recorded in the RTI submission prior to the stipulated date of 19 March 2020. Any adjustments made after this cut-off point are irrelevant for CJRS calculations. The principles underscore a strict adherence to the legislation’s wording and alignment with the overarching public policy intentions. Importantly, the decision reinforces not only the sanctity of statutory provisions but also the limitations of the tribunal’s jurisdiction in reviewing HMRC’s administrative conduct.

This case serves as a cautionary tale for employers who altered employee compensation structures with a view to leveraging government support schemes. The key takeaway for legal practitioners is that compliance with the precise terms of such schemes is imperative, and any advice on remuneration structures must be traced back to the legal definitions and stipulated dates within the governance framework of the regulations.

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