Key Facts
- •Aramark Ltd (Appellant) appealed HMRC's decision requiring payment of secondary Class 1 National Insurance Contributions (NICs) totaling £6,830,899.
- •The dispute centered on the application of the Host Employer Provisions (HEP) in the Social Security (Categorisation of Earners) Regulations 1978.
- •Aramark used Aramark US Offshore Services LLC (OSI) to employ personnel providing hotel and catering services on offshore installations.
- •Aramark argued that the arrangement avoided secondary NICs liability because OSI, a non-UK entity, employed the personnel and didn't make their personal service available to Aramark under the HEP.
- •The arrangement involved transferring Aramark employees to OSI and Aramark providing various services to OSI to facilitate service provision back to Aramark.
Legal Principles
Purposive construction of the HEP, considering its purpose and the facts realistically.
Paragraph 26, 44
HEP applies only where a worker is contractually employed by a foreign employer and remains so employed; personal service must be both 'made available' to and 'rendered for' the host employer's business; and the personal service must be wholly available to the host employer.
Paragraph 27
The meaning of 'personal service' in the HEP aligns with its conventional meaning in employment law, focusing on the worker's own work and skill, without requiring control by the host.
Paragraph 67, 68
'Made available' means the foreign employer puts the employee at the disposal of the host employer, enabling deployment of the worker's personal service.
Paragraph 72
'Rendered' implies that the personal service made available comes under the control of the host employer, indicating a secondment-like arrangement.
Paragraph 75
The HEP is an 'all or nothing' provision; the host employer's liability is triggered only if the entire personal service is made available and rendered to the host.
Paragraph 79
The HEP aims to impose secondary NICs liability where a party exerts substantive day-to-day control over a worker employed by a foreign entity, working in the host's business.
Paragraph 61
In determining whether a scheme aimed at avoiding tax involves a series of steps planned in advance, it is permissible and necessary to consider the scheme as a whole.
Paragraph 45
Outcomes
Appeal dismissed.
The Tribunal found that Aramark exercised substantive day-to-day control over OSI employees, even though OSI was the contractual employer. The personal service of the employees was made available to and rendered for Aramark's business, satisfying the HEP criteria.