Daniel Witton v The Commissioners for HMRC
[2024] UKFTT 489 (TC)
L Rowland & Company (Retail) Limited v The Commissioners for HMRC
6 June 2024
[2024] UKFTT 513 (TC)
First-tier Tribunal
A company is appealing tax assessments, arguing that its locum pharmacists are not employees. The judge said they need more evidence from locum pharmacists to make a fair decision, so ordered both sides to provide more witness statements. The judge also decided not to award the company costs yet, waiting until the final decision on the tax appeal.
Key Facts
- •Appeal concerning income tax and National Insurance Contributions assessments.
- •Principal issue: Whether locum pharmacists are employees for tax purposes.
- •Applications for additional witnesses, further particulars, disclosure, and costs.
- •Over 1,000 locum pharmacists engaged by the appellant.
- •HMRC's inability to provide a detailed case on the 'third stage of the Ready Mixed Concrete test' due to lack of locum pharmacist interviews.
- •Appellant's argument against additional witnesses due to proportionality and existing evidence.
Legal Principles
Ready Mixed Concrete test for determining employment status.
Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at [515]
Employment status is determined on an individual basis, considering various aspects of the worker's activity.
Hall v Lorimer [1992] ICR 739 at p744
Objective intention of the parties when reaching their agreement is key in determining employment status.
HMRC v Atholl House Productions Ltd [2022] EWCA Civ 501 at [123]
Tribunal's power to require specific persons to provide documents and information.
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, Rule 5(2)(d) and Rule 16
Parties must assist the Tribunal to further the overriding objective.
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, Rule 2(4)
Interim costs orders can be awarded in complex cases.
Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, Rule 10(1)(c)
Determining success for interim costs requires the substantive appeal to be decided.
Bastionspark [2016] UKUT 425 at [19]
Common sense approach to interim costs orders (successful party)
Day v Day [2006] EWCA Civ 415 at [16]
Outcomes
HMRC to provide details of five additional locum witnesses.
Insufficient locum witness evidence to fairly determine employment status of over 1,000 locum pharmacists; need for a representative sample.
HMRC to provide further and better particulars of their case on the third stage of the Ready Mixed Concrete test after witness evidence is obtained.
HMRC's inability to provide a detailed case before obtaining additional witness statements.
Appellant's application for interim costs order refused.
It's not possible to determine success at this stage; costs will be addressed after the substantive hearing.
Disclosure agreed in principle, with provision for application to the Tribunal if the sampling process cannot be agreed.
Parties agreed the disclosure in principle.