UT/2023/000049 - [2024] UKUT 00233 (TCC)

In determining whether a contract gives rise to employment, the same contract can be classified in different ways at different times. It was entirely natural to consider each assignment within the arrangement as part of the same employment relationship, and artificial to consider each assignment as a distinct, separate employment.

HMRC’s approach would give rise to the anomaly of a need to issue a P45 at the end of each assignment.

There would be no apparent legislative purpose in an analysis based on how the contract was classified between assignments.

The “single employment” analysis is consistent with the approach in relation to agency contracts in sections 44 to 47 ITEPA. It is perverse that the position would be better in Mainpay’s case if the contract had been an agency contract.

Where there is an overarching contract of employment, each assignment is part of the same employment. Logically, this cannot be due to the position in the gaps between assignments and must be due to the classification as an employment contract of that overarching contract. The FTT’s analysis of the Contracts as framework agreements, providing the basis for separate contracts of service, could be applied equally to an overarching contract of employment. Neither HMRC nor the FTT has properly explained why there should be a difference.

The Upper Tribunal in Reed gave no reasons for rejecting this argument.