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HMRC internal manual

Employment Status Manual

HM Revenue & Customs
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Case Law: Barnett v Brabyn

1996 case - 69TC133

Point at issueThere were two issues the court had to consider in this case. The preliminary issue was whether it was open to Mr Brabyn to challenge additional assessments under Case I Schedule D on the ground that he was never an independent contractor even though the main assessments had been appealed and determined under Section 54 TMA 1970. It was decided he could challenge the additional assessments.

The second and substantive issue was the nature of his employment status.

FactsMr Barnett had been working abroad and whilst he was there, his father had invited him to come back to the UK to work for him with the prospect of becoming a partner in the business of a partnership he had with a Mrs Flack. The partnership traded as “LTV” and its business was the duplicating of video tapes. Mr Barnett was engaged as a video and television technician. There was no written contract between Mr Barnett and LTV.

Mr Barnett advised the Revenue at the outset that he was self-employed and it was only at a much later date that he argued for employee status.

DecisionIt was held in the High Court that the General Commissioners were correct in their decision that Mr Barnett was an independent contractor.

CommentaryLightman J prefaced his consideration of the facts by saying it was a quite exceptional case in three respects:

  • The findings of fact by the Commissioners were somewhat limited “no doubt because Mr Barnett, who could have revealed all, declined to give evidence”.
  • There were clear, and well-founded, findings by the Commissioners as to the intended nature of the relationship.
  • There was a very special (family) relationship between Mr Barnett and one of the two partners, his father.It was found as fact that Mr Barnett “did have the right to control his input to LTV timewise”, that there was clear mutual intention for self-employment and there was the “cogent factor of the previous determinations all made on this basis”.

Lightman J considered the six factors put forward by Mr Barnett’s Counsel in favour of a contract of service but considered that their weight was much reduced by the fact that Mr Barnett was able to work as much or as little as he wished and by the family relationship which existed. He concluded by saying that “the Commissioners were plainly correct in their decision as to the status of Mr Barnett” and dismissed the appeal.

This case is of little precedent value from a status point of view. The fact that Mr Barnett chose not to give evidence meant that the findings of fact were extremely limited. The first time status raised its head as an issue was when the additional assessments were appealed. In the absence of detailed facts in support of employment being given to the Inspector or to the General Commissioners, it is hardly surprising that the Commissioners and Lightman J dismissed the appeals.

Lightman J does however emphasise the point that

“whilst reference to authority may be of assistance in determining questions of law…a comparison of the badges to be found in the case in question and previous cases and an analysis of the relevant weight afforded to particular badges in previous cases are generally unhelpful.”In other words there is little to be gained from comparing the facts of one case with another. This point also featured in the case of Walls v Sinnett (see

ESM7130). Previous cases are only of assistance in determining questions of law.