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A flying club engaged instructors on the basis that they were self-employed contractors.
The instructors notified the club of the times when they could provide instruction and were free to work elsewhere.
HMRC ruled that the instructors were employees and issued Income Tax (PAYE) Regulations SI 2003/2682 reg 80 determinations for the years 2005/06 and 2006/07.
The club appealed arguing that the relationship between it and the instructors was one of a contract for services.
It claimed that no contract of service existed because the three conditions i.e. mutuality control and substitution laid down in Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 and described in Montgomery v Johnson Underwood Ltd [2001] ICR 819 as the ‘irreducible minimum’ necessary for such a contract to exist were not met.
The Special Commissioner said that the...
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