The Commissioners for HMRC v RALC Consulting Limited
| Judge | Mr Justice Richards |
| Judgment Date | 15 April 2024 |
| Neutral Citation | [2024] UKUT 99 (TCC) |
| Counsel | Christopher Stone,And Marianne Tutin,Michael Paulin,For |
| Date | 15 April 2024 |
| Year | 2024 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
Neutral Citation: [2024] UKUT 00099 (TCC)
Case Number: UT/2020/000377
UPPER TRIBUNAL
(Tax and Chancery Chamber)
Rolls Building, Fetter Lane,
London, EC4A 1NL
INCOME TAX – NATIONAL INSURANCE CONTRIBUTIONS – intermediaries legislation –
Contributions (Intermediaries) Regulations 2000 – whether First-tier Tribunal erred in
failing properly to construct hypothetical contract – yes – whether First-tier Tribunal erred
in its application of the test of mutuality of obligation to the hypothetical contract – yes –
appeal allowed – decision set aside and case remitted to First-tier Tribunal
Heard on: 14 and 15 December 2023
Judgment date: 12 April 2024
Before
MR JUSTICE RICHARDS
JUDGE ASHLEY GREENBANK
Between
THE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMS
Appellants
and
RALC CONSULTING LIMITED
Respondent
Representation:
For the Appellants: Christopher Stone, counsel, and Marianne Tutin, counsel, instructed
by the General Counsel and Solicitor to His Majesty’s Revenue and
Customs
For the Respondent: Michael Paulin, counsel, instructed by Tax Networks Ltd.
DECISION
INTRODUCTION
1. This is an appeal by the appellants, the Commissioners for His Majesty’s Revenue and
Customs (“HMRC”), against a decision of the First-tier Tribunal (the “FTT”) dated 3
March 2020 (the “Decision”).
2. In the Decision1, the FTT allowed the appeal of the respondent, RALC Consulting
Limited (“RALC”), against a decision of HMRC to issue notices of decision and
determinations charging RALC to income tax and national insurance contributions
(“NICs”) under the “intermediaries legislation” (commonly known as IR35), which is
and the Social Security Contributions (Intermediaries) Regulations 2000 (the “SSCI
Regulations”).
3. The various notices of decision and determinations relate to the tax years 2010/11 to
2014/15. The amounts of income tax and NICs (excluding interest) at issue are £164,482
and £78,842 respectively.
4. HMRC appeals to this tribunal with the permission of the FTT.
BACKGROUND
5. We will need to approach the findings of fact as made by the FTT in more detail later in
this decision. However, to set the scene, we will first describe the factual backdrop to this
dispute, none of which, we understand, is in dispute.
6. RALC is the personal service company of Mr Richard Alcock, an IT consultant. At all
material times, Mr Alcock was the sole director of, and the sole shareholder in, RALC.
7. During the relevant tax years, RALC provided the services of Mr Alcock for fixed
periods of time under three sets of contractual arrangements that are relevant to this appeal.
In each case, there were four parties to the chain of contracts: Mr Alcock, RALC, an
agency, and the “end client”. The end client in the case of two of the sets of contractual
arrangements was Accenture (UK) Limited (“Accenture”), a management consultancy and
professional services firm. The end client in the other case was the Department for Work
and Pensions (“DWP”). The agency for the engagements with Accenture was Networkers
Recruitment Services Limited (“Networkers”) and the agency for the engagement with
DWP was Capita Resourcing Limited (“Capita”).
8. In all cases, the contractual arrangements involved: an agreement between RALC and
the agency, to which the parties, and the FTT in the Decision, referred as the “lower level
contract” or “LLC”; and a further agreement between the agency and the end client, to
which the parties and the FTT in the Decision, referred as the “upper level contract” or
“ULC”. We have adopted the same terminology in this decision notice. There must also
have been a further contract, between RALC and Mr Alcock, though the FTT made no
findings as to the terms of that contract, no doubt because it proceeded on the basis that
RALC could safely be viewed as an alter ego of Mr Alcock. No-one has suggested to us
that the terms of any contract between Mr Alcock and RALC are significant.
1 In this decision notice, we refer to paragraphs in the Decision in the format “FTT [xx]”.
1
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