Social security regulations and personal service companies

Big Bad Wolff (BBW) was a personal service company through which Robert Glenister an actor provided his services to clients. HMRC decided that under the Social Security Contributions (Intermediaries) Regulations 2000 the company was liable to primary and secondary class 1 National Insurance. The question was how Mr Glenister would have been treated had he contracted directly with end clients without BBW acting as an intermediary.

The First-tier Tribunal dismissed the taxpayer’s appeal so the matter progressed to the Upper Tribunal.

The lower tribunal concluded the Social Security (Categorisation of Earners) Regulations SI 1978/1689 caused the requirements of reg 6(1)(c) of the intermediaries regulations to be satisfied. This was on the basis that Mr Glenister would have been treated as employed by end clients under these regulations. The taxpayer said the question was whether had he entered into a hypothetical contract directly with end clients he...