Expenses were not deductible from workers' earnings

The taxpayer - an umbrella company - engaged workers who supplied services to end users or clients. The workers were taken on under an overarching contract of employment so that it covered any gaps between assignments as well as the assignments. The taxpayer said that because each workplace was temporary travel and subsistence expenses would be deductible from the workers’ earnings for tax purposes.

HMRC said each assignment was a ‘separate employment’ involving attendance at a permanent workplace. Travel and subsistence expenses were as a result not deductible. It raised determinations accordingly against which the taxpayer appealed.

The First-tier Tribunal found in favour of HMRC and the matter progressed to the Upper Tribunal.

The taxpayer claimed that its implicit obligation to provide a specified number of hours’ work and the worker’s requirement to consider proposed assignments in good faith meant there was a mutuality of obligation. The Upper...