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‘Mr Fowler is a qualified diver who is resident in the Republic of South Africa. During the 2011/12 and 2012/13 tax years he undertook diving engagements in the waters of the UK’s continental shelf. HMRC stated that he is liable to pay UK income tax for this period. Whether he is liable depends on the application of a Double Taxation Treaty between the UK and South Africa. Article 7 of the Treaty provides that self-employed persons are taxed only where they are resident (i.e. South Africa), whereas article 14 provides that employees may be taxed where they work (i.e. the UK). For the purposes of this appeal, the parties have assumed that Mr Fowler was an employee. Mr Fowler claims he is nevertheless not liable to pay tax in the UK. His case centres on a “deeming provision” in section 15 of the UK’s Income Tax (Trading and Other Income) Act 2005 (“ITTOIA”). This provides that an employed seabed diver is “treated” as self-employed for the purposes of UK income tax.’

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UKSC Blog, 26th May 2020

Source: ukscblog.com