2007 Tax Judgement

IN THE HIGH COURT OF JUSTICE – CHANCERY DIVISION ON APPEAL FROM THE SPECIAL COMMISSIONER

Royal Courts of Justice, Strand, London – 30th January 2007

Before
THE HONOURABLE MR JUSTICE PUMFREY
Between
Hudson Contract Services Limited (The “Appellant”)
and
Her Majesty’s Revenue & Customs (The “Respondent”)

The scheme of obligations entered into in this manner is, from the practical point of view at least, efficacious. There is no question of seeking to infer a contract of employment between the client and the operative; rather, what HMRC seek to do in the present case is to imply a contract for service between the client and the operative on the footing that if such a contract subsists, then Hudson cannot be said to satisfy the requirements of the section.

Having found, therefore, that there is no obligation to be implied between the client and the operative, the Special Commissioner accordingly held that the only contract under which labour was contracted to the client was provided by the appellant, and accordingly its business consisted of or included such furnishing of labour.

In my judgement, the Special Commissioner’s approach is not to be criticised in this respect. Accordingly, I conclude that the cross-appeal (by HMRC) is unsuccessful.