Host employer provision and control test

The taxpayer was part of a group of companies which offered services in the oil and gas industry globally including in Dubai and Singapore. Under contracts between the taxpayer and the platform operators the taxpayer had to provide drilling services along with all management supervision personnel materials and equipment specified in the contract. It did not employ any offshore employees but had agreements with offshore employers to supply crews. However as those offshore employers did not have a UK-based human resources arrangement they appointed the taxpayer to provide human resources services.

On the basis that the offshore employees were not UK-resident the taxpayer did not pay secondary class 1 National Insurance for them.

HMRC said the host employer provisions (HEP) applied and secondary class 1 National Insurance was due. It issued a demand for the years 2004 to 2014. The taxpayer appealed...