TC09663 - [2025] UKFTT 01250 (TC)

Mr Young opened the Appellant’s case by saying that the issue for determination is, fundamentally, about the nature of the supply being made; whether it is a supply of labour or something else. In further amplification of this submission, he asserted that there is not a ‘supply of labour’. We reject this submission and agree with Mr Stone’s submission that this is not the statutory question that we must determine. This is because this appeal does not concern VAT. The issues of statutory interpretation and the application of statute that arise in this appeal do not call for a proper categorisation, for VAT purposes, of any supply in this appeal; whether that be a supply by the dog-handlers to the Appellant, or by the Appellant to its end-clients. What we require to do in determining this appeal is to focus on the statutory language in s 44, and the conditions included therein.

Mr Young further referred to case law relating to employment status. We find that his reliance on such case law is based on false premises. This is because the test for employment status is not relevant in the context of this appeal. That is fundamentally because there is an exemption in s 44(2)(b) ITEPA (if money is a subject of PAYE then Chapter 7 does not apply). Consequently, there will never be a situation where a person is both an employee and caught by the Agency legislation. Therefore, the case law that relates to employment status that has been referred to by Mr Young does not assist us in the circumstances of this appeal. It is common ground that none of the dog-handlers were employees of the Appellant. There is, however, an overlap between the Agency legislation and the test for employment (to the extent that one is looking at control). Furthermore, there is mutuality in the agreements whenever the work is being performed. In this respect, we have considered the test for mutuality set out in PGMOL, which was referred to and relied upon by Mr Stone. We will return to consider PGMOL later.

In order to determine the live issue in this appeal, it is necessary to look at the words used in the legislation, and what it requires. The task is simply to interpret the legislation and apply it to the case at hand.