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Not from the employment: from something else

In HMRC v Julian Martin, at paragraph 55 of his decision, Judge Warren stated:

“It is clearly the case that not every payment which an employee makes to an employer is negative general earnings. This is not a matter of dispute. To give an obvious example, the repayment of money which a cashier had stolen from their employer’s till would not be such an item. The mere existence of an employment relationship is not enough.�

Judge Martin expanded on this in paragraph 56 as follows:

“Nor is a connection between the payment and the contract of employment of itself necessarily sufficient. A claim for an account of profits alternatively for damages where an employee misuses his employer’s trade secrets or acts in breach of a restrictive covenant during the course of his employment can be said to arise out of the contract of employment: it certainly has a connection with it. But no one would suggest that a payment pursuant to an order for an account of profits or damages would entitle the employee to assert that the payment was negative general or taxable earnings�.