Tyler Security Ltd vs HMRC – A Recent Employment Tribunal Case Highlighting the Intricacies of Employment Status and How Section 44 Fits In.

In the recent employment tribunal Tyler Security Ltd (TSL) v HMRC [2025] UKFTT 1250 (TC), TSL lost its appeal against HMRC’s finding that PAYE should have been deducted from payments to specialist dog-handlers supplied to clients for security and search-dog detection work.

The issue was whether the handlers’ payments were “earnings” under ITEPA 2003, ss. 44–47 (the agency legislation), which applies where an individual personally provides services under supervision, direction or control (SDC).

TSL’s contracts required it to supply search-dog operatives and their dogs, with fees based on hours worked. The FTT held that s.44(1)(a) does not require a contractual obligation for personal service—only that the worker did personally provide it. The handlers’ presence was essential to the service: without them, no effective search work could occur. The dogs were treated as specialist equipment operated by trained personnel.

On SDC, the tribunal found:

• TSL and/or clients held the right of SDC over handlers.
• Client contracts imposed KPIs, site rules, training, and assignment instructions.
• TSL–handler contracts allowed disciplinary action and task allocation.
• Instructions, dress codes, and standard operating procedures set out how work was to be done, and supervisors and client briefings reinforced control.
• TSL ran training sessions to maintain performance standards.

The FTT therefore concluded that SDC existed and s.44(1)(a) was met, making payments subject to PAYE.

Takeaway: Engagers should draft contracts to avoid any indication of SDC—such as training, mentoring, disciplinary powers, or dress codes—as these strongly indicate employment-like control under the agency rules.

Solution: This recent tribunal case highlights the importance of taking proactive steps to prevent disputes with HMRC before they arise. Preventative measures are always the best option.

For over 25 years, The Guild has supported businesses in navigating the complexities of employment status and compliance. Had TSL engaged a service like Guild Freelancing, one of two outcomes would have occurred:

1. Our comprehensive status assessments would have identified that the dog-handlers were not suitable for self-employment, allowing TSL to adjust its arrangements before any risk emerged; or
2. If the handlers had passed our assessments, The Guild would have engaged them directly on TSL’s behalf—protecting the business from any potential HMRC action.

In either case, TSL could have avoided significant financial and reputational damage.

Don’t wait for HMRC to make the first move—let The Guild safeguard your business from risk.
Contact us today to discuss how our CIS payroll and self-employed engagement services can keep you compliant and secure.