Employment status case
The Special Commissioners recently heard an appeal which concerned whether individuals who worked for a double glazing firm were independent contractors or employees. This and similar scenarios are often before the Courts and in this case a significant amount of the decision concerned established case law.
One of the main arguments in this case, as is so often the case, was the concept of “mutuality of obligations”. Both the Appellants and HRMC argued that the facts in this regard supported their case. ‘Mutuality of obligations’ exists when the employer is obliged to offer work to the individual and they are obliged to perform the work themselves. HMRC eventually won the argument on this point following significant comment from the Special Commissioner who ultimately concluded that he "did not regard it as necessary in relation to an individual engagement to show that there is an obligation to provide work and an obligation to perform it. I consider that there was mutuality of obligation in each of the individual assignments undertaken by each of the workers. The worker agreed to carry out the work, and JL Windows agreed to pay the worker for that work”.
Ultimately, however HMRC lost the case when the Special Commissioner decided that the Appellants did not exercise a sufficient degree of control over the workers which would have categorised an employer/employee relationship.
It is important that readers are aware of the importance of establishing facts in cases such as these and the significant amount of case law which underlies any decision. In this case the Appellants won, and, interestingly, the Special Commissioner commented in the final paragraph of his decision that “the workers were in business on their own account, albeit in a modest way”.