Lewis (t/a MAL Scaffolding) v HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judgment Date | 27 March 2006 |
| Date | 27 March 2006 |
| Court | Special Commissioners |
special commissioners decision
Dr David Williams
Mr Dave Smith and Ms Sarah Thompson of Accountax Consulting Ltd for MAL Scaffolding and some of the individual appellants. The other individual appellants did not attend and were not represented
Mrs Chris Leggett, Ms Jane Hodge and Mr Mike Faulkner, officers of Revenue and Customs for the Respondents
None of the third parties attended or were represented
Income tax - National Insurance contributions - whether named individuals were employees of a named employer or were sub-contractors employed in the construction industry - whether other named individuals are parties to those decisions
1 This decision is about the employment status of a number of individuals who worked during all or part of the tax years 1998-1999 to 2001-2002 for or with the business run by Mr Lewis under the name "MAL Scaffolding". MAL Scaffolding was subject to individual decisions about the individuals below variously for those years. Mr Lewis was also subject to Regulation 80 determinations in the following sums for those years:
1999-2000 £30,335.90
2000-2001 £65,781.58
2001-2002 £71,905.38
And, as noted below, he was subject to a decision related to unidentified individuals.
2 Before turning to the question of the status of the individuals involved that is the substance of these appeals, it is necessary to identify the appellants and the third parties to whom this decision applies. For convenience, in this decision:
"the workers" refers to all those who were individually identified as working for or with Mr Lewis during the period from 1999-2000 to 2001-2002 other than Mr Edwards;
"MAL Scaffolding" refers to Mr Lewis in his capacity (according to the Respondents, and disputed by him) as employer of the workers and the unidentified workers;
"the individual appellants" means all appellants other than MAL Scaffolding;
"the Commissioners" refers to the Commissioners for Her Majesty's Revenue and Customs, and their predecessors, the Commissioners of Inland Revenue, the Respondents in all the appeals;
"the third parties" means all the workers to whom this decision applies other than the individual appellants, but does not, for the avoidance of doubt, include any unidentified workers.
3 MAL Scaffolding was run by Mr Lewis as a sole trader throughout the periods in question. The business was subsequently incorporated, but that does not affect these appeals.
4 Mr Edwards is Mr Tony Edwards. He was contract manager for MAL Scaffolding during part of the period in question. He was originally an appellant in these appeals, as was MAL Scaffolding in respect of his status. Both he and MAL Scaffolding have now withdrawn their appeals and accept that he was an employed earner during the period of his employment with MAL Scaffolding. Those appeals have now been closed.
5 Some of the workers appealed, as did MAL Scaffolding, against notices of decision that the workers were employees, and that MAL Scaffolding was liable to pay income tax under the PAYE system and National Insurance contributions ("NI contributions") for them, or that they had that liability. In addition, the Commissioners sought to impose liability on MAL Scaffolding in respect of unidentified workers for the year 1998-1999, and again MAL Scaffolding appealed. All the appeals were joined together to be heard at a common hearing following a direction by me on 18 May 2005. Others of the workers were joined by me as third parties to the common hearing by a direction made on 12 December 2005.
6 Accountax Ltd represented MAL Scaffolding and some individual appellants both before and at the hearing. Other individual appellants were separately represented, but none of them attended or were represented at the hearing. No third party took an active part in the proceedings although some sent responses to my direction either directly or through a representative.
7 An appendix to this decision sets out:
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(a) The workers
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(b) the status of each worker for the purposes of these appeals,
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(c) The agreed work status of each worker,
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(d) The periods of assessment in which the Commissioners considered the workers to be employees, and
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(e) The sums notified as the liability for NI contributions for each of those years.
To avoid doubt I also list all the individuals involved in these appeals below. I also indicate whether I received direct evidence from that individual at the hearing or indirect evidence in the papers about the status of that individual.
8 The individual appellants are:
L Bligh (note of telephone conversation by Commissioners on 09 04 2003)(party to an employment tribunal decision)
R Boxall
N Day
Wayne Day (gave oral evidence)
Mark Horan (gave oral evidence) (statement taken on 29 05 2002) (note of telephone conversation by Commissioners on 17 01 2005) (signed answers to questions supplied on 17 04 2005)
Emmerson Isted (gave oral evidence) (statement taken on 23 05 2002) (notes of telephone conversations by Commissioners on 06 10 2004, 13 10 2004 and 05 01 2005)
J Logan
JP MacLachlin
W Pemberton
Dominic Pocock (gave oral evidence) (signed answers to questions supplied on 19 04 2004)
Kevin State (who gave oral evidence) (signed answers to questions supplied on 19 04 2005)
9 The Commissioners requested the Special Commissioner to join all the other individuals who were named by the Commissioners as, in their view, employees of MAL Scaffolding during the periods in question as parties to the appeals. A Special Commissioner has the power under regulations 7 (proceedings to be heard together or in succession) and 8 (joining of additional parties) of the Special Commissioners (Jurisdiction and Procedure) Regulations 1994 both to hear proceedings at the same time or consecutively if common issues arise in both or all of the proceedings, and to join persons other than the appellants and respondents to any proceedings as a party to the proceedings. Several appeals having already been joined on the common issue of the employment status of certain categories of individuals working with or for MAL Scaffolding, it appeared to me desirable to add the other named individuals as parties to the proceedings so that all the named individuals in those categories were parties to the joined appeals about their status. Accordingly, I directed that notice be served, and it was served, on the following individuals joining them as parties to these proceedings:
R Armstrong
S Bligh (party to an employment tribunal decision)
P Dadswell
TM Day
R Hamblin
J Harding
M Hogg
T Holmes
N Kerswell
S Munro
I Pepper
M B Phillips
R Stanley
B Sullivan
N Tahsin (statement taken on 29 05 2002)
P Walker
M Wright
10 Several other individuals are named in the papers in a context that suggests that they were working for or with MAL Scaffolding. Some gave consent for appeals to be made on their behalf. However, they are not named in any assessment before me and they are neither appellants nor third parties for the purpose of this decision. Others, again, were employees of MAL Scaffolding at the relevant time, including Mr Lewis's secretary and a lorry driver, but again they are not involved in these appeals.
11 All the above are named individually in income tax assessments and/or decisions about NI contributions. In addition, the Commissioners imposed a regulation 80 determinations on MAL Scaffolding, dated 18 01 2005 and in the sum of £23,000. The Commissioners gave notice of decision on 18 01 2005 to MAL Scaffolding as follows:
That various workers are employed earners in respect of their engagements with Mr M Lewis t/a MAL Scaffolding for the period from 6 March 1999 to
5 April 1999.
That Mr Lewis t/a MAL Scaffolding is liable to pay primary and secondary Class 1 contributions in respect of the earnings from those engagements.
The amount that Mr Lewis t/a MAL Scaffolding is liable to pay in respect of those earnings is £1021.26.
12 The Commissioners agreed that this raised the issue of principle whether it is possible to charge an employer for NI contributions on unnamed employees. The Commissioners had previously accepted that regulation 49 determinations could not be made against MAL Scaffolding with regard to income tax payable for unnamed individuals, and those notices were withdrawn and replaced by the notices under appeal. It raises the additional question here, where the status of all those named is in question, whether the employment status of an unnamed person can be determined. But, clearly, if none of the named individuals is an employee, then that decision will fail in any event. I therefore consider it only after the specific decisions and assessments.
13 Accountax and the Commissioners presented an agreed bundle of documents. In addition, oral evidence under oath or affirmation was given by Mr Lewis, Mr Edwards, and the five individual appellants named above. Formal witness statements were presented for each witness other than Mr Isted.
14 No party produced any documents that were, or were contended to form any part of, or be written evidence of, a contract of employment or a contract for services agreed between MAL Scaffolding and any of the workers during any of the years in question. Nor is there any other document that records any of the matters that might usually be expected to form conditions of a contract of employment, or a contract for services, or common to both. The only documents I have seen are copies of advertisements, which were ambiguous and of little evidential value, and copies of statements accompanying payments made to one of the workers for work performed, which again adds little to the overall picture save that they are clearly not standard slips for the payment of wages to an employee. I...
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Christa Ackroyd Media Ltd
...and the First-tier Tribunal, albeit they are not of course binding on us. He referred us to Lewis (t/a MAL Scaffolding) v R & C Commrs (2006) Sp C 527, Paya Ltd [2016] TC 05386 and Tomlinson [2017] TC 05943. Paya Ltd was a similar case to the present involving BBC presenters but the decisio......
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Littlewood v HM Revenue and Customs
...that the present appeals had much in common with the recent Special Commissioners cases of Lewis t/a MAL Scaffolding v R & C CommrsSCD(2006) Sp C 527 and Parade Park Hotel v R &C CommrsSCD(2007) Sp C 599. These cases referred to many of the legal arguments raised in both the Appellants' and......
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Castle Construction (Chesterfield) Ltd v HM Revenue and Customs
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J and C Littlewood t/a JL Window & Door Services(1) Mark Molloy(2) v Her Majesty's Revenue & Customs, SPC 00733
...in common with the recent Special Commissioners cases of Mark Lewis t/a MAL Scaffolding and others v Revenue and Customs Commissioners [2006] STC (SCD) 253 (SpC 527) and Parade Park Hotel v Revenue and Customs Commissioners [2007] STC (SCD) 430 (SpC 599). These cases referred to many of the......