Primary Path Ltd v The Commissioners for Her Majesty's Revenue & Customs, TC 01306
| Jurisdiction | UK Non-devolved |
| Judge | A Edward SADLER |
| Judgment Date | 06 July 2011 |
| Neutral Citation | [2011] UKFTT 454 |
| Respondent | The Commissioners for Her Majesty's Revenue & Customs |
| Appellant | Primary Path Ltd |
| Reference | TC 01306 |
| Court | First-tier Tribunal (Tax Chamber) |
[2011] UKFTT 454 (TC)
TC01306
Appeal number TC/2009/15647
NATIONAL INSURANCE CONTRIBUTIONS – INCOME TAX (PAYE) –
worker supplied through intermediaries – “IR 35” – whether worker would
be employee if there were a contract between the worker and the client – no
–Regulation 6, Social Security Contributions (Intermediaries) Regulations
2000 – s 48 Income Tax (Earnings and Pensions) Act 2003 – appeal allowed
FIRST-TIER TRIBUNAL
TAX
PRIMARY PATH LTD Appellant
- and -
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS Respondents
TRIBUNAL: EDWARD SADLER (TRIBUNAL JUDGE)
NIGEL COLLARD
Sitting in public at 45 Bedford Square, London WC1 on 12 April 2011
Matthew Boddington, of Accountax Consulting, for the Appellant
David Lewis, of Her Majesty’s Revenue and Customs, for the Respondents
© CROWN COPYRIGHT 2011
2
DECISION
Introduction
1. This is an appeal by Primary Path Ltd (“the Appellant”) in relation to what is
commonly referred to as the IR 35 legislation. That legislation has effect so that a 5 company which makes available to its client the services of an individual (usually the
controlling shareholder of the company) can be liable both to pay National Insurance
contributions and to a charge under the Pay As You Earn regulations in relation to
earnings attributed to the individual in question if the circumstances of the
arrangements are such that the individual would have been an employee of the client 10 (rather than a self-employed independent contractor) had the client engaged the
services of the individual directly.
2. As detailed below, the Appellant provided the services of Mr Philip Winfield
(“Mr Winfield”) to the Appellant’s client, GlaxoSmithKline plc (“GSK”) (through the
services of agency companies) on two occasions during the period 4 June 2001 to 14 15 March 2003. The Commissioners for Her Majesty’s Revenue and Customs (“the
Commissioners”) took the view that the circumstances of those arrangements were
such that, had they taken the form of a contract between Mr Winfield and GSK, Mr
Winfield would have been regarded as an employee of GSK. Accordingly, the
Commissioners: 20
(1) Issued a Notice of Decision dated 5 October 2007 addressed to the
Appellant pursuant to section 8 of the Social Security Contributions (Transfer of
Functions, etc.) Act 1999 and Regulation 6(4) of the Social Security
Contributions (Intermediaries) Regulations 2000 for the period 6 April 2001 to 5
August 2002 treating the Appellant as liable to pay primary and secondary Class 25 1 National Insurance contributions in respect of Mr Winfield’s attributable
earnings from the arrangements (rendering the Appellant liable to a net
contribution, after credit for contributions paid, of £9,676.89); and
(2) Issued two Notices of Determination, each dated 5 October 2007, under
Regulation 80 of the Income Tax (Pay As You Earn) Regulations 2003 for the tax 30 years 2001/2002 and 2002/2003 requiring the Appellant to pay in total
£15,420.84 in relation to the attributable earnings of Mr Winfield from the
arrangements with GSK.
3. The Appellant appealed against both the Notice of Decision and the two Notices
of Determination on 24 October 2007. 35
4. At the hearing before us the Appellant agreed that if its appeal were decided in
favour of the Commissioners, then the Commissioners were entitled to require further
National Insurance contributions, for the period up to 14 March 2003, which is the
date on which the arrangements between the Appellant and GSK were terminated.
Accordingly, we were asked to give our decision in principle as to liability, leaving it 40 to the parties to agree the final amounts due should we dismiss the Appellant’s appeal.
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