Wednesday 9 – Thursday 10 February 2022
This is a second appeal. The appellant, HMRC, appeals with the permission of Upper Tribunal Judges Mr Justice Marcus Smith and Judge Jonathan Richards, their decision of 18 February 2021, whereby they dismissed HMRC’s appeal.
The respondent company is the personal service company (`the Company’) of Kaye Adams, a journalist and broadcaster. The dispute relates to whether the arrangement for Ms Adams to present a radio show fell within the `intermediaries legislation’. Hence whether her fee should be treated as employment income with the Company being liable to account for PAYE tax and NI contributions. The Company appealed to the First-tier Tribunal against HMRC’s determinations and the FTT allowed the Company’s appeal. HMRC appealed against that decision to the Upper Tribunal. The UT remade the FTT’s decision and reached the same conclusion, but for different reasons.
The appeal concerns the application of Chapter 8 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 (`ITEPA’) and the equivalent provisions in the Social Security Contributions (Intermediaries) Regulations 2000, in particular, the question of where services are provided not under a contract directly between the client and the worker but under arrangements involving a third party (`the intermediary’), whether the circumstances were such that if the services were provided under a contract directly between the client and the worker, the worker would be regarded for income tax purposes as an employee of the client.