The High Court has upheld a Tax Appeals Commissioner’s determination that pizza delivery drivers engaged by Karshan (Midlands) Limited, trading as Domino’s Pizza, worked under contracts of service and were taxable under Schedule E for the 2010 and 2011 tax years.
The company had argued that the drivers were self-employed and should be taxed under Schedule D. It appealed by way of case stated, asking the High Court to assess whether the Commissioner had erred in law. The appeal was not a new hearing of the evidence. The company bore the burden of establishing the alleged errors, and the court said its role was deferential to the Commissioner’s assessment of the facts.
The appeal focused on mutual obligations, substitution, integration into the business and the weight given to the written contracts. The Commissioner had found that the contractual arrangement combined an umbrella agreement with individual contracts for each roster or assignment. Drivers submitted availability, and once rostered they had obligations connected with their shifts. The High Court found no error in the Commissioner’s conclusion that mutual obligations existed in those individual contracts.
The written agreement described drivers as independent contractors, paid them by delivery and allowed for a substitute when a driver was unavailable. But the court noted that substitutes came from the company’s pool of drivers and were paid directly by the company. The Commissioner was entitled to treat that arrangement as a replacement between drivers rather than genuine subcontracting by one driver.
The court also rejected the company’s argument that the Commissioner had considered only whether deliveries were integral to the business. The determination had considered how drivers were incorporated into the operation, including uniform and vehicle branding, customer-facing duties and the company’s role in coordinating the service.
The High Court said the practical operation of the relationship mattered alongside the written terms, whose description of drivers as independent contractors was not decisive. It concluded that the company had not established an error in the Commissioner’s application of the law on any of the grounds raised.
The court ruled that the Commissioner was correct in law and said it would hear counsel on the precise terms of the order for each question. The judgment does not set out those final order terms.