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...
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