Adam Tolley QC

Together with Kickabout Productions Ltd v HMRC (heard by the same constitution of the Court), this is the first time the Court of Appeal has dealt with appeals about the application of the IR35 legislation as to the tax treatment of income deriving from the provision of a worker’s services through a third party, usually a personal service company. The judgment is of general application to the correct approach for determining employment status and is therefore of interest to all employment and tax practitioners.

In summary, the Court of Appeal has established important points of principle as to the right approach to the application of the Ready Mixed Concrete test and the status and nature of the ‘business on own account’ test. It also held that the Autoclenz approach does not apply outside the context of protection of statutory employment/worker rights.

HMRC succeeded in their appeal. The Court decided that the Upper Tribunal was wrong to have determined the employment status of Kaye Adams under a hypothetical contract with the BBC by focusing on the status she had during her professional career rather than the terms and circumstances of the particular engagements with the BBC. In addition, the Upper Tribunal was wrong to have taken into account matters which were not or may not have been known to both contracting parties. 

The decision has been remitted to the Upper Tribunal to apply the correct test.

Adam Tolley QC acted for HMRC, leading Christopher Stone and Marianne Tutin (of Devereux Chambers). 

The Court of Appeal’s decision can be found here.