1. HMRC v Atholl House Productions Ltd [2022] EWCA Civ 501 (LINK) and Kickabout Productions Ltd v HMRC [2022] EWCA Civ 502 (26 April 2022) – (LINK)
In these joined cases, The Court of Appeal (“CoA”) handed down decisions on the application of employment status tests in the context of IR35. This is the first time the CoA has considered this issue, and HMRC succeeded in both appeals.
When assessing employment status for tax purposes under the IR35 rules, HMRC is required to look at the relationship between the individual who provides the services and the end user of those services and determine whether, if there were a direct contract between the end user and the individual, it would be a contract of employment or not. To determine whether the contract is one of employment, the factors established in the Ready Mixed Concrete case are applied, namely: (i) mutuality of obligation; (ii) control; and (iii) whether the other provisions of the contract are consistent with an employment contract rather than self-employment.
Both of the joined cases concerned radio presenters providing their services to an end user via their personal services companies (“PSCs”). The decisions are both complex, but the following aspects are notable:
• Control and mutuality of obligation are necessary, but not sufficient, indicators of employment status. Without them, there will be no employment contract, but where they are present it is still necessary to carry out a multi-factorial assessment of the...
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