In the case of Bilfinger Salamis UK Ltd v HMRC [2026] UKUT 143 (TCC), the UT has dismissed an appeal against the FTT’s earlier decision that the company (“Bilfinger UK”) was liable to pay Class 1 secondary NICs in respect of employees it provided via a Guernsey subsidiary (“Bilfinger Guernsey”) to Marathon Oil UK Ltd (“Marathon”) in connection with Marathon’s operation of oil platforms on the Brae field in the North Sea (see the Claritax News story).
National insurance contributions – secondary Class 1 contributions – host employer provision – meaning of “made available” – appeal dismissed
Bilfinger UK had previously contracted directly with Marathon and the offshore structure had been implemented as a result of Marathon’s desire not to have to bear the economic cost of secondary contributions. As the UT noted:
“As the FTT found, the scheme adopted was intended for no other purpose than to avoid a liability to secondary Class 1 NICs. For Marathon and the appellant, the world would, as a matter of substantive reality, continue as it did before the scheme was put into effect.”
The FTT had judged that the planning had failed as Bilfinger UK had been caught by para. 9 of Sch. 3 to The Social Security (Categorisation of Earners) Regulations 1978 (“the host employer provision”) as the the personal services of the employees of Bilfinger Guernsey were “made available” to Bilfinger UK. The company had appealed this decision arguing that (as summarised by the UT):
“although the FTT had correctly held that the expression ‘making available’ in the host employer provision entailed ‘some’ degree of direction to lie with the proposed host employer, the FTT had erred in law in either (a) fixing, as a matter of law, on too low a degree of direction, or (b) concluding that the facts found by the FTT were sufficient to amount to the degree of direction required.”
However, the UT did not agree. Noting that “It is question of law for us to determine the meaning of the expressions ‘made available’ and ‘rendered for the purposes of the business’ in the host employer provision” it concluded that:
“In deciding that question, we need to determine whether those words are used in an unusual sense. In our view, there is nothing in the context suggesting that they are. Rather, they are common, everyday words and should be given their ordinary meaning. There is nothing in the ordinary meaning of those words that implies that the host employer must have some level of direction in relation to the rendering of the personal service. The presence or absence of direction in the host employer may be relevant as a factor to be considered in determining whether or not the ‘personal service’ of a person is ‘made available’ to another but it is not part of the statutory test.”
There was therefore no requirement for any degree of direction so the company’s grounds of appeal of appeal had failed. However, the UT noted that, in reaching its decision, the FTT had erred in law:
“The simple questions for the FTT were whether, as a matter of ordinary language, and in a real and practical sense, the effect of the scheme ‘made available’ the personal services of the employees to the appellant and whether those services were then “rendered” for the purposes of the appellant’s business. In answering those questions, the FTT was required to regard the scheme as a whole and as it was intended to operate. That was all that the FTT was required to do.
Accordingly, the FTT was wrong to hold that some degree of direction must necessarily lie with the host employer if the host employer provision was to apply, and, to that extent only, we consider that the FTT erred in law.”
Considering whether the error of law was material to the FTT’s decision, the UT concluded that:
“We do not consider that there is any realistic possibility that the FTT in this case might have reached a different conclusion if it had directed itself to the law as we have declared it to be. … The decision of the FTT as to the outcome (namely, that the host employer provision did apply throughout the relevant period with the result that the appellant was correctly assessed to secondary Class 1 NICs) stands.”
https://caselaw.nationalarchives.gov.uk/ukut/tcc/2026/143
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