The Upper Tribunal allowed an appeal against the First-tier Tribunal on notice period and work obligation but still found that a locum urologist was in an employment relationship under the hypothetical contract test.

Background

Mr Mantides, a urologist, provided locum services to Royal Berkshire Hospital (RBH) through his personal service company. HMRC determined that IR35 rules applied, treating payments as employment income. The FTT had erroneously found that the hypothetical contract would contain both a notice period and an obligation for RBH to use reasonable endeavours to provide work.

Judgment

Despite setting aside the FTT decision due to material errors of law, the Upper Tribunal still concluded that the hypothetical contract was one of employment. Applying the three-stage Ready Mixed Concrete v Minister of Pensions and National Insurance [1967] 2 QB 497 test and considering the Supreme Court’s guidance in HM Revenue & Customs v Professional Game Match Officials Limited [2020] UKUT 147 (TCC), the tribunal found sufficient mutuality of obligation and control, with other factors on balance pointing to employment. The absence of a notice period and work obligation were not sufficient to alter the overall conclusion.

Endnote

This case reinforces that the nature and extent of mutual obligations remain relevant at the third stage of employment status determination, but courts will look at the totality of the relationship, with no single factor being decisive. The judgment confirms that IR35 analysis requires a “painting a picture” approach, not merely a mechanical checklist exercise.

Read the full decision of the Upper Tribunal: George Mantides Limited v HMRC [2025] UKUT 00124 (TCC)