The personal service was made available to UK company

The taxpayer supplied services including employees to Marathon Oil UK Ltd which operated oil platforms in the North Sea. Core employees were on permanent contracts and other were on short-term contracts. When the contract was about to end Marathon put out a tender asking for an employment model which did not incur employer National Insurance contributions to be considered ‘if possible’. As a result the taxpayer incorporated BIS Guernsey to which the core employees were transferred. The ad hoc employees remained employees of the taxpayer. BIS Guernsey entered into a contract to supply labour and equipment to the taxpayer which contracted to provide human resource services for BIS Guernsey.

The issue was whether the taxpayer was liable for employer class 1 National Insurance (Social Security (Categorisation of Earners) Regulations SI 1978/1689 para 9). The host employer rules apply when the ‘personal services’ of individuals employed...