The Upper Tribunal has dismissed an appeal against a decision that a UK company was liable to secondary Class 1 national insurance contributions on the earnings of employees of a non-resident group company in Aramark Limited v HMRC [2026] UKUT 00348 (TCC).
Under an intercompany agreement its employees were transferred to a US group company, OSI, which had no residence or presence in Great Britain and no place of business here, and OSI supplied services back to Aramark so that Aramark could perform its contracts with the operators.
The First-tier Tribunal found that the arrangement had the sole object of eliminating the cost of secondary contributions. HMRC assessed Aramark to £6,830,899 plus interest under the host employer provision in paragraph 9 of Schedule 3 to the Social Security (Categorisation of Earners) Regulations 1978. That provision makes a host employer the secondary contributor where the personal service of an employee of a foreign employer is made available to the host and rendered for the purposes of the host's business.
The First-tier Tribunal held that personal service could be made available to a host with no control over the employee, but that it could not be rendered for the purposes of the host's business unless the host controlled the worker's granular day-to-day activities, which it found Aramark did. The Upper Tribunal has since held in Bilfinger Salamis UK Limited v HMRC [2026] UKUT 143 (TCC) that neither limb carries any requirement of control. The appeal therefore turned on whether the Tribunal should depart from Bilfinger.
It declined to do so. The Upper Tribunal is not bound by its own earlier decisions, but as a matter of comity will follow them unless satisfied that the earlier decision is wrong. Drawing on Gilchrist and British Gas Trading v Lock, the Tribunal held that the various formulations of that threshold, whether expressed as being "convinced", "satisfied" or as the earlier decision being "manifestly wrong", all mean the same thing, and rejected Aramark's submission that, because this is a specialist jurisdiction, the Tribunal enjoyed greater latitude when considering whether to depart from its own earlier decisions. Comity does not mean courtesy alone. Only the Inner House can reverse Bilfinger, so an appellant must do more than advance the submissions it would make there.
The Upper Tribunal found that one of Aramark's criticisms of Bilfinger met that threshold, whether based on the ordinary meaning of "made available", the 2014 amendments, the reference to secondment in the Explanatory Note, or the language of the surrounding provisions. The First-tier Tribunal had therefore erred in requiring control, but the error was immaterial and its decision stands. A challenge to the finding on control was rejected as ‘island hopping’: criticism of individual findings in isolation rather than engagement with the cogency of the decision as a whole.
Aramark also argued that HMRC's reading would apply indiscriminately to ordinary commercial subcontracting, which could not have been the legislative intention. The Tribunal disagreed, identifying two ways in which such arrangements remain outside the provision: the worker may be providing personal service to the subcontractor rather than to the main contractor, and the service may be rendered for the purposes of the subcontractor's business. What made this case different was the finding that OSI, the equivalent of the subcontractor here, was a contractual shell.
This is the second Upper Tribunal decision holding that the host employer provision requires no control by the host, and the Tribunal's treatment of comity makes it unlikely that a third panel will take a different view. For anyone with an assessment under the pre-2014 wording, the construction argument is in practice now one for the appellate courts rather than the tribunals: permission to appeal in Bilfinger was refused by the Upper Tribunal and a renewed application was before the Court of Session at the date of release. A further decision may follow shortly, the Upper Tribunal having heard Odfjell Technology with its decision awaited, and an appeal in Wood Group is also in train. Both concern the same provision, and in both the First-tier Tribunal held that it applied.
Bayo Randle appeared for the Respondents, led by Adam Tolley KC.
A full copy of the decision can be found here.
