TC09663 - [2025] UKFTT 01250 (TC)

Fecha: 17-Jul-2025

The Appellant’s submissions

The Appellant’s submissions

64.

Mr Young’s submissions can be summarised as follows:

(1)

The dog-handlers do not fall within s 44(1)(a) ITEPA. This is because, as a matter of fact, a sub-contractor is not an individual or ‘worker’. The subcontractor is making a composite supply of dog detection services to the Appellant, which go beyond the supply of an individual worker and should not be categorised as personally provided service. Some of the Appellant’s sub-contractors are VAT registered and HMRC accept that they make a standard-rated supply of services. This is inconsistent with the Determination that there is a supply of ‘labour’.

(2)

Section 44(2) ITEPA excludes s 44 where the service provided is not subject to SDC. The evidence is that the dog detection services are supplied under the control of the subcontractor, and not the Appellant or the operators of the venue where services are performed.

(3)

The services do not fall within s 45 as the sub-contractor is not an individual worker with a view to personally providing service to another person since the services are composite in nature, and may be taxable supplies for the purposes of VAT. Given that the Appellant supplies dog detection services to its clients, and not workers, it is not an agency for s 44 purposes. A subcontractor may provide a different handler and dog, as may be necessary, and this is inconsistent with a contract of service: Express & Echo Publications.

(4)

The services of dog detection are not personally performed by a dog-handler. The Appellant exercises no control over the dog; nor does it exercise control as to how services are performed. The dog performs services under the control of its handler. Accordingly, the service is not provided by a worker, as defined by s 230(3)(b) of the Employment Rights Act 1996. The services of dog and handler are indivisible. The dog and handler cannot be interchanged as the pair are certified as a single unit. There cannot be a contract of employment in these circumstances.

(5)

The sub-contractors who train both handler and dog, and maintain the dog at great expense, are in a business on their own account: Ready Mixed Concrete.

(6)

HMRC’s manual relies upon Peter Gibson LJ’s ruling that where a person is not required to perform his services personally, the relationship is not one of worker and employer. It follows that there can be no agency contract as defined and, as such, the Agency legislation (s 44) does not apply for tax purposes: Talentcore.

65.

At the start of his submissions, Mr Young sought to advance the argument that the Determination had been raised capriciously. He could not, however, gainsay the fact that the Appellant’s Grounds of Appeal did not raise the issue of whether the Determination was to ‘best judgment’.