Kate Balmer successful in Reed Employment appeal and judicial review

The Upper Tribunal (Tax and Chancery Chamber) (“UT”) has handed down judgment in Reed Employment Plc & Others v HMRC [2014] UKUT 0160 (TCC), a high value appeal and judicial review concerning the tax treatment of certain payments, described as ‘travel allowances’, to Reed’s temporary employees between 1998 and 2006. 

Kate Balmer, instructed by HMRC, with Malcolm Gammie QC and Adam Tolley, successfully upheld the earlier decision of the First Tier Tribunal (Tax Chamber) (“FTT”) that Reed was liable for £158 million in unpaid PAYE and NICs. The UT found that Reed’s ‘travel allowance’ payments were part of the ordinary salary of its temporary employees and as such, PAYE and NICs were due.  The Upper Tribunal also dismissed the claim for judicial review, finding that Reed had failed to make full disclosure to HMRC and had not put all of its “cards face upwards on the table”.

The UT judgment, which will be of interest to tax and employment practitioners alike, covered a wide range of legal issues including employment status, salary sacrifice schemes, the FTT’s jurisdiction to hear judicial review claims and the UT’s jurisdiction to overturn and remake factual findings below. The UT also made a number of interesting observations about the scope of an appeal on a point of law. For example, criticising the deployment of “a fine toothcomb in order to discover some detail of criticism while failing to stand back and see the Decision as a whole”.

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