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Finally under this heading, mention must be made of pensions. Occupational pensions paid out to former employees are taxable under ITEPA 2003, Pt 9, but not because they are 'earnings', which are taxed under ITEPA 2003, Pts 2–7. If pensions were earnings, they could also be taxed under those provisions and most of ITEPA 2003, Pt 9 would be unnecessary. Only benefits from EFRBS are taxed under the employment parts of ITEPA 2003, and then they are 'treated as employment income' by ITEPA 2003, ss 393–400 (Pt 6, Ch 2), from which it must be inferred that they are not employment income otherwise.

Pension annuities from retirement annuity policies (RAP) and personal pension policies (PPP) are also taxed under ITEPA 2003 as pension income rather than employment income. With occupational pensions there is a clear, direct relationship to a former employment, although that employment might conceivably have ended 40 years before the pension comes into payment, and a pension might also be paid on account of disability rather than former employment.

Old cases such as Stedeford v Beloe¹