We are being taken to court by the Government for a breach of the Employment Business and Employment Agency Regulations Act for the supply of an IT consultant.
The regulations define an employment business as supplying an individual who "is under the control" of the hirer. We only supply highly skilled IT individuals and we do not believe that the individual was under the control of the hirer.
We believe that if an individual is under the control of the hirer then the person we supplied can only be described as "an employee" as they pass the basic test of common law "master - servant" and as such they should be paying tax in accordance with IR35. Conversly, if the hirer believe that they are under "the control" of the hirer then the hirer should therefore be complying with the Agency Workers Regulations.
I have seen some case law which argues that certain individuals whom are not under the control of the hirer i.e. Brain Surgeon but is still classed as an employee but I am trying to see if there is any case law that works in the reverse, i.e. they are under the control of the hirer but are not considered an employee.
Can you help ?
Thanks UK SolicitorJA,
I read your link, but from my reading, this has more to do with mutuality of obligation than control per se. Also it would appear that she was initially considered an employee and then this was overturned on appeal but the decision doesn't appear to have been motivated by control.
How can I get to see the full reading ? Where can I go to search for the transcripts for this and related cases ?
Our issue is that the client is going to argue that the consultant is under the control of the hirer, the consultant is going to argue that they were not under the control.
The hirer is arguing that they are under the control because they took a number of other consultants who were being supplied by us on via another company and are now trying to use the regulations to say they don't owe us anything for taking these other consultants.
The consultant in question in the crowns case has his own Limited Company and will have been paying himself as a company director and not as PAYE. If he is deemed effectively an emloyee his personal tax return should reflect this.
In addition, if the hirer claims that the individuals are under their control then they should really be fulfilling the obligations of the Agency Workers Directive (Regulations)
What would happen in a court of Law if two parties on the prosecution side are arguing against each other. And how would a court view a company which claims protection under statute but is not complying with another piece of statute ?
I look forward to your reply
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