TILBURY CONSULTING LTD v MARGARET GITTINS (HMIT) (SPC NO.0579) (2003)

Sp Comm (AN Brice) 15/8/2003

TAX - CIVIL PROCEDURE

DIRECTIONS : WITNESSES : SUMMONS : INTERESTS OF JUSTICE : CLIENTS : REAL COMMERCIAL RISK : EMPLOYED EARNERS : CONTRACTS OF SERVICE : NOTIONAL CONTRACT

The interests of justice were best served by the grant of a witness summons even though the summons posed a real commercial risk to the appellant taxpayer.

Preliminary hearing on directions in an appeal from a decision of the respondent.

The appellant's director ('R') contracted with the appellant ('TCL') who contracted, through another company, with Ford Motor Company ('Ford').

The issue on the appeal was whether R would have been regarded as employed in employed earner's employment by Ford if he had contracted directly with Ford.

The respondent wrote to a Ford employee ('B') to establish the nature of R's engagements with Ford via a list of questions.

B answered the list and when questioned again voiced his displeasure at having been troubled by the matter again.

The respondent sought a witness summons to be issued requiring B to give oral evidence at the appeal as it was necessary to hear from both parties to the notional contract.

TCL objected that there was a real commercial risk that B or Ford might conclude that the arrangements with TCL were more effort than they were worth if they were summoned to the appeal and argued for B's evidence to be in writing according to the letters he had already answered.



HELD: The witness summons was to be issued.

The interests of justice were the overriding objective and they were best served by the grant of the summons.

The presumption was that an application for such a summons would normally be granted.

The desirability of producing evidence from both the worker and the client was emphasised in the explanatory leaflet on IR35 appeals and the decision in Lime-IT Ltd v Justin (2003) STC (SCD) 15.

It was clear that B had relevant evidence to give that might be expanded or clarified by oral evidence.

Judgment accordingly.


Theresa Naylor of Accountax Consulting Ltd (chartered tax advisers) for TCL. Barry Williams of the Inland Revenue Appeals Unit London for the respondent.

LTL 11/9/2003 : (2004) STC (SCD) 1

Document No. AC0105730

Source: Lawtel http://www.lawtel.co.uk , copyright acknowledged.