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Employment Law Case Update – January 2025

Employment Law

A range of decisions from across the spectrum of employment jurisdiction this month as we take a look at some of the most recent cases. A tribunal determined that a consultant contracted through a service company was a worker, making deductions for employer NICs unlawful. The EAT overturned a re-engagement order for an unfairly dismissed employee due to errors in assessing contributory conduct and the issue of the employer’s lost trust. The EAT also found that a tribunal failed to address key issues in a race discrimination claim where an employee alleged her job re-evaluation requests were mishandled due to her ethnicity. And the Court of Appeal upheld that a tribunal erred in determining the timing of a discrimination claim where it was based on delayed knowledge of key facts.

  • Workers: Consultant engaged by recruitment agency via service company was a worker
  • Remedies: EAT declared tribunal erred in ordering re-engagement of employee
  • List of Issues: Tribunal erred in failing to address race discrimination allegation not pleaded but included in list of issues
  • Discrimination: Tribunal erred in determining claimant’s date of knowledge of claims

Workers: Consultant engaged by recruitment agency via service company was a worker

In Appiah v Tripod Partners Ltd ET/2302929/202, an employment tribunal has found that a consultant who contracted with a recruitment agency through a service company was a worker of the agency under the Employment Rights Act 1996 (ERA 1996).

Ms Appiah was an independent social worker. Tripod Partners Ltd, a social care recruitment agency, placed her on an assignment to the Home Office. The Home Office assessed Ms Appiah using HMRC’s CEST tool. It decided she fell inside IR35 and should therefore be taxed as an employee.

Ms Appiah had previously contracted with Tripod through an umbrella company. However, following the Home Office assessment, Tripod gave her the additional options of an arrangement within PAYE or of contracting via a service company. Tripod explained that there were “small differences” in these options. It also confirmed that if she opted for a service company, it would deduct income tax and employee national insurance contributions (NICs) from her hourly pay. She decided to contract via a service company.

Once the contract had been finalised, Tripod made deductions from Ms Appiah’s pay for income tax, employee NICs and employer NICs. Ms Appiah accepted that Tripod was entitled to make deductions for income tax and employee NICs. However, she brought a claim alleging that the deductions for employer NICs were unlawful under the ERA 1996. Tripod argued that Ms Appiah was not a worker, so could not bring a claim for unlawful deductions.

The tribunal noted that the relevant contract was between two limited companies. However, this was not determinative. The efficacy of statutory protections would be eroded if everyone working through a service company was excluded from the rights afforded by ERA 1996.

It was evident that Ms Appiah was a worker. She sent timesheets to Tripod, not invoices. The contract said she was not a worker, but this did not reflect the reality. She worked full-time on her assignment, performing services personally. There was no difference in substance between the contractual arrangements she had been offered; they were simply different ways in which her payment could be channelled to her. She was not in business on her own account and neither the Home Office nor Tripod were her client. There was no route by which the contractual arrangement could genuinely be said to be between two businesses.

The tribunal went on to uphold Ms Appiah’s claim for unlawful deductions from wages in respect of Tripod’s deductions for employer NICs.

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Remedies: EAT declared tribunal erred in ordering re-engagement of employee

In British Council v Sellers [2025] EAT 1, the EAT has held that a tribunal erred in ordering the re-engagement of an employee who had been unfairly dismissed following an allegation of sexual misconduct.

Before ordering re-engagement, a tribunal must consider the employee’s wishes, whether it is practicable for the employer to comply with a re-engagement order and, where the employee caused or contributed to their dismissal, whether ordering re-engagement would be just (section 116(3), Employment Rights Act 1996).

In this case, the tribunal found that, while the relevant decision-taker genuinely believed the employee had committed the alleged misconduct, their belief was unreasonably derived from a flawed investigation which the appeal process had failed to rectify. Following this decision, but before the remedy hearing, the employer instructed an independent investigator to undertake a fresh investigation. The investigator concluded that the accuser had been truthful. The employer upheld its gross misconduct finding.

At the remedy hearing, the employer did not argue that the employee had caused or contributed to his dismissal. Instead, it argued that its genuine and rational concerns about his conduct made it impracticable to re-employ him. The tribunal considered itself bound to address the issue of contributory conduct and found that, on the balance of probabilities, the alleged sexual assault did not occur. It held that it was irrational for the employer to have concerns about the employee’s conduct based on the independent investigation which it considered to be flawed in several respects. The tribunal ordered re-engagement. The employer appealed.

The EAT held that the tribunal erred in determining whether the employee had committed the alleged misconduct. Section 116(3) does not mandate the tribunal to make a finding on contributory conduct. Only where the tribunal has made such a finding (at the liability stage or because it was raised on remedy) would it need to consider whether it would be just to order re-engagement.

The tribunal had also erred by losing sight of the fact that practicability had to be determined from the employer’s perspective. It had considered the reasonableness of the independent investigation when it should have considered whether re-engaging the employee was likely to be practicable in circumstances in which the employer had accepted the investigation’s finding that he had committed a sexual assault and considered that he could no longer be trusted. The re-engagement order was set aside.

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List of Issues: Tribunal erred in failing to address race discrimination allegation not pleaded but included in list of issues

In Bogdan v The Cabinet Office: Government Digital Services [2024] EAT 177, the EAT has allowed an appeal where an employment tribunal either failed to address, or failed to give adequate reasons for rejecting, a direct race discrimination claim in which the claimant, Ms Bogdan, alleged that her requests to re-evaluate her job grade were not adequately addressed by her employer, and this was less favourable treatment because she is a Romany Gypsy.

Ms Bogdan was a litigant in person when she issued her claim. In the claim form, there was no hint of any suggestion that she had made several job re-evaluation requests or been subjected to race discrimination by having such requests ignored, mishandled or refused. However, an employment judge subsequently conducted case management, which resulted in a list of issues. This stated that the allegation of direct race discrimination included that, from the beginning of her employment, she had made several job re-evaluation requests to her line manager. The thrust of her case, as set out in the list of issues, was that her employer had failed to deal with those requests, which had left her job wrongly graded.

An employment tribunal dismissed all of Ms Bogdan’s claims. She appealed on the basis that the tribunal failed to adequately deal with her direct race discrimination claim, as there was material evidence to which no reference was made and about which no adequate reasons appeared in the judgment.

The EAT allowed part of the appeal relating to the issues contained in the list of issues concerning her repeated job re-evaluation requests. It concluded that the list of issues effectively operated as substantial amendments to the originally pleaded claims in a way that neither Ms Bogdan’s employer nor the employment tribunal had fully appreciated. Despite the fact that her case, as presented at the tribunal, was not her pleaded case, the EAT concluded that the issues contained in the list of issues were squarely before the tribunal, yet it had fundamentally omitted to deal with them. It was therefore not apparent from its reasoning why she was not successful on those issues. This was a serious procedural irregularity, and the EAT remitted those issues to a new tribunal.

The case is a reminder of the importance of the parties and the tribunal being alive to the issues contained in the list of issues and ensuring that these are adequately dealt with in the reasons contained in the tribunal’s judgment.

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Discrimination: Tribunal erred in determining claimant’s date of knowledge of claims

In HSBC Bank plc v Chavalier-Firescu [2024] EWCA Civ 155, the Court of Appeal has upheld the EAT’s decision that a tribunal erred in determining the date on which a claimant had sufficient knowledge to bring her discrimination claims.

In July 2018, the claimant learned that her application to join HSBC Bank plc had been unsuccessful and that someone from her previous employer, Barclays, had given her a bad reference. She had ongoing sex discrimination proceedings against Barclays at that time, but only suspected that this was the reason for the bad reference. However, in August and September 2020, information disclosed following her data subject access request led the claimant to believe that she had been considered a very strong candidate by HSBC, but that a senior manager, on learning of her sex discrimination claim against Barclays, had provided negative feedback to her interviewer, leading to HSBC’s decision not to hire her.

The claimant presented claims against HSBC in November 2020 and May 2021. A tribunal struck out the claims, holding that they were presented out of time as the decision not to appoint her was made in July 2018, there was no continuing act, and it was not just and equitable to extend time.

The court held that the EAT had correctly found that the tribunal had erred in striking out the claims. It had failed to explain its reasoning that the claimant was fully aware of the elements of her claim in July 2018 or show that it had taken proper account of the fact that she had only learned information to support her claims in 2020.

Underhill LJ held that where, as in this case, a claimant seeks an extension of time on the basis that they were unaware of important facts material to the viability of their claim, it is necessary for the tribunal to consider the extent of their knowledge, or grounds for suspicion, at the relevant time to assess what justice and equity require. Following Barnes v Metropolitan Police Commissioner UKEAT/0474/05, it will also be relevant to consider whether they should have known or suspected and, if they did, whether it was nevertheless reasonable for them to delay issuing proceedings. The claims were remitted to a different tribunal to consider whether it would be just and equitable to extend time.

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Further Information

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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Employment Law Case Update – December 2024

Employment Law

In our last update of the year we bring you technical tribunal processes about not including additional claims at tribunal, how to interpret the Equality Act in relation to the definition of “related to” and how to properly assess value in an assessment of injury to feelings.

  • Tribunals: Employment tribunal entitled to refuse amendment where claimant had made informed decision not to include additional claims in ET1
  • Race Discrimination: Comments about employee’s accent could be “related to” race for harassment purposes, even if not motivated by race
  • Sexual Discrimination: Tribunal’s assessment of injury to feelings in pregnancy discrimination case was “totally flawed”

Tribunals: Employment tribunal entitled to refuse amendment where claimant had made informed decision not to include additional claims in ET1

In Vassallo v Mizuho International plc and another [2024] EAT 170, the EAT held that an employment tribunal had been entitled to refuse a claimant’s application to amend her claim to add a whistleblowing complaint and an indirect sex discrimination complaint. The claimant had been legally represented and there was evidence she had taken a conscious decision not to include those claims in the original ET1.

The EAT has held that an employment tribunal had been entitled to refuse a claimant’s application to amend her claim to add whistleblowing claims and an indirect sex discrimination claim, because the tribunal had been entitled to conclude that she had been legally advised and had made an informed choice not to put them in her ET1.

The claimant’s ET1, which had been drafted by solicitors and submitted in March 2023, contained complaints of breach of contract and disability discrimination. Her solicitors then came off the record. In August 2023, the claimant, having instructed new solicitors, applied to amend her claim to add complaints of detriment and automatic unfair dismissal arising from protected disclosures (the whistleblowing claims) and indirect sex discrimination. The tribunal refused the application to amend, and later declined to reconsider that refusal. It found that no good reasons had been given as to why the claims were not included in the ET1, or for the delay in applying to amend. It noted that the claimant had been legally represented, and it was clear from email correspondence in the hearing bundle that her former solicitors had prepared an earlier draft ET1 containing the whistleblowing claims, but the final ET1 had not included them. The tribunal concluded an informed decision had been taken not to include those claims. The balance of injustice was also in favour of the respondents.

The claimant appealed, arguing that the tribunal had made findings of fact not supported by evidence and/or based on erroneous assumptions. She also argued that she had been badly advised and did not know she had a potential whistleblowing claim.

The EAT refused the appeal. The tribunal had heard evidence and submissions from both parties and had been entitled to conclude that careful thought had been given to the drafting of the ET1. The tribunal did not have to adopt an inquisitorial role in relation to the claimant’s state of knowledge; it was up to the claimant what evidence to introduce and whether to waive privilege in her former solicitors’ advice. Furthermore, it did not matter whether it was the claimant or her former solicitors who made the decision not to include the additional claims in the ET1, since the claimant bore ultimate responsibility for her solicitors’ actions.

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Race Discrimination: Comments about employee’s accent could be “related to” race for harassment purposes, even if not motivated by race

In Carozzi v University of Hertfordshire and another [2024] EAT 169, the EAT held that an employment tribunal was wrong to find that comments about an employee’s accent were not harassment under the Equality Act 2010 because they were not motivated by her race. Such comments could nevertheless be “related to” race.

Ms Carozzi, a Brazilian national of Jewish ethnic origin, was employed by the University of Hertfordshire. She resigned before completing her probationary period (which had twice been extended). She brought a number of employment tribunal claims, including for race-related harassment and victimisation. Her harassment claim centred on comments that had been made about her accent. Her victimisation claim alleged that the University’s HR representative, Ms Withers, had refused to share with her the notes of a meeting, because she might then use them against the University in a race discrimination claim.

The tribunal dismissed her claims. It found that the comments about Ms Carozzi’s accent had not been motivated by her race. Rather, they had been about her intelligibility or comprehensibility when communicating.

As for the victimisation claim, the tribunal found that Ms Withers had decided against providing the meeting notes knowing that they might give Ms Carozzi “ammunition” for an employment tribunal claim. However, Ms Withers would have done the same with any other employee who had indicated an intention to make an employment tribunal claim, such as constructive dismissal, that was not based on the EqA 2010. In any event, it did not consider that the treatment could be detrimental, based on Khan and Derbyshire. Ms Carozzi appealed to the EAT.

The EAT allowed the appeal and remitted the harassment and victimisation claims to a fresh tribunal. The EAT observed that there are a number of components in a complaint of harassment, one of which is that the harassment must be “related to” a protected characteristic such as race. In its view, the tribunal had erred in its approach to that component.

The tribunal had stated that a mental element is required in a claim of harassment as much as in a claim of direct discrimination. However, the EAT held that this was wrong. The tribunal had placed considerable emphasis on the Court of Appeal’s decision in Nailard. The issue in that case had been whether the employer’s failure to investigate a grievance alleging sex discrimination was itself related to sex, and therefore an act of harassment. Nailard had not been about harassment in the more typical circumstances in which a complaint is made about words spoken to, or behaviour towards, an individual, and whether that conduct is related to a protected characteristic.

The EAT held that there is no requirement in a harassment claim for a “mental element” equivalent to that in a claim of direct discrimination. Treatment may be “related to” a protected characteristic where it is “because of” the protected characteristic, but that is not the only way conduct can be related to a protected characteristic. There may be circumstances in which harassment occurs where the protected characteristic did not motivate the harasser. The EAT gave the further example of a person who unknowingly uses a word that is offensive to people who have a relevant protected characteristic because it is historically linked to oppression of people with that characteristic. The fact that the person using the word did not know that it had such a connotation would not prevent the word being related to the protected characteristic. The use of the word could therefore potentially amount to harassment, applying the factors in section 26(4) of the EqA 2010, notably the perception of the complainant and whether it is reasonable for the conduct to have the effect of violating their dignity.

The EAT went on to observe that an accent may be an important part of a person’s national or ethnic identity. Comments about a person’s accent could be related to the protected characteristic of race. Criticism of such an accent could violate dignity. Obviously, that did not mean that any mention of a person’s accent will amount to harassment. The tribunal would have to consider whether the comment about an accent in a particular case was unwanted and related to race, as well as considering the other elements of section 26.

The EAT held that the tribunal had asked itself the wrong question to establish the reason for the refusal to supply the meeting notes. It should not have asked whether a person who might have brought a different type of claim (that did not amount to a protected act under the EqA 2010) would have been treated differently. The correct question for the employment tribunal was whether the decision not to provide the meeting notes was to a material degree influenced by the fact that Ms Carozzi had made or might make a complaint of unlawful discrimination.

It noted that the EqA 2010 definition of victimisation no longer requires a comparison to be made with the treatment of others. Regarding detriment, the House of Lords in Khan had held that an employer may take reasonable steps to protect its position in discrimination proceedings without this being considered unlawful victimisation. This had led the tribunal in the instant case to conclude that there had been no detriment. However, the tribunal in this case had not considered whether the parties thought that there were likely to be employment tribunal proceedings. Specifically, it had not considered whether an employee who brings a grievance, that might resolve the issue without the need for tribunal proceedings, might reasonably consider themselves disadvantaged by not being provided with the notes of a meeting. Accordingly, the EAT allowed the appeal on this point.

This case confirms that the “related to” test in the definition of harassment is wider than the “because of” test (sometimes referred to in case law as the “reason why” test) that applies to direct discrimination. Conduct can be related to a protected characteristic either where it is motivated by the protected characteristic, or where, regardless of the conscious or unconscious motivations of the alleged harasser, there is objectively some relationship between the conduct or language used and a protected characteristic. Sexist jokes and racial epithets are obvious examples, but the unwitting use of, for example, homophobic, transphobic or ableist language may also, depending on the circumstances (particularly the reasonableness test), be capable of meeting the definition of harassment.

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Sexual Discrimination: Tribunal’s assessment of injury to feelings in pregnancy discrimination case was “totally flawed”

In Shakil v Samsons Limited [2024] EAT 192, the Claimant had only been working for the Respondent for about six months when she called in sick with ‘morning sickness’. In response and without notice, the Respondent reduced the Claimant’s hours of work  criticising her capability and conduct. It then placed her at risk of redundancy, ultimately dismissing her, one month before she was due to start maternity leave.

Unsurprisingly, the Claimant took a claim of pregnancy discrimination to the tribunal who agreed with her. It was clear to the tribunal that the Respondent’s actions were due to the Claimant’s pregnancy-related illness and that the redundancy had been invented to deal with the Claimant’s pregnancy. In making the award, however, the tribunal simply made an injury to feelings award of £5,000 without any reference to ‘Vento bands ’ or where the Claimant’s injury fell within those bands. The Claimant appealed the award.

The EAT found this assessment to be “totally flawed” and allowed the appeal on the basis that the tribunal had failed to apply the Vento guidelines at all. In particular, the tribunal did not:

  • identify the detailed evidence given by the Claimant in her witness statement about the injury to feeling she suffered as a result of the discrimination;
  • make any findings of fact about the injury to feelings suffered;
  • refer to Vento at all;
  • refer to any statutory provision or authority relevant to assessing injury to feeling;
  • identify the relevant bands for this claim in Presidential Guidance;
  • state which band the injury to feelings fell within;
  • explain why the award was set as it was within the band.

The EAT remitted the matter of remedy to a fresh tribunal rather than impose an alternative injury to feelings award itself.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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Employment Law Case Update – June 2023

Employment Law

This month we look at several aspects of the Equality Act through the lens of religious discrimination, race discrimination and harassment. We also take a look at how one should properly calculate holiday pay so as not to fall foul of the Working Time Regulations.

  • Religious Discrimination: EAT remits Facebook posts case and sets out principles underpinning proportionality assessment
  • Race Discrimination: Judgment against qualifications body held not to be Meek-compliant
  • Harassment: Claimant must be aware of the unwanted conduct in order for it to amount to harassment
  • Holiday Pay: How to calculate holiday pay on termination of employment

 

Religious Discrimination: EAT remits Facebook posts case and sets out principles underpinning proportionality assessment

In Higgs v Farmor’s School [2023] EAT 89, the EAT held that in dismissing a direct religion or belief discrimination claim brought by a Christian employee following complaints relating to her social media posts which criticised the nature of sex education in schools (including gender fluidity and same sex marriage) the employment tribunal had erred in that it failed to:

  • conclude that there was a close or direct nexus between the employee’s Facebook posts and her protected beliefs
  • determine the reason why the employer acted as it had, and
  • assess whether the employer’s actions were prescribed by law and necessary for the protection of the rights and freedoms of others

The proportionality assessment, which the tribunal had not carried out, was necessary to determine whether the employer’s actions were because of, or related to, the manifestation of the employee’s protected beliefs, or were in fact due to a justified objection to the manner of that manifestation.

The EAT also set out basic principles that underpin the approach adopted when assessing proportionality of any interference with rights to freedom of religion and freedom of expression to assist tribunals and to better inform employers and employees as to where they stand on issues arising from the manifestation of religious or other philosophical beliefs.

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Race Discrimination: Judgment against qualifications body held not to be Meek-compliant

The case of General Medical Council v Karim [2023] EAT 87 concerned a claimant doctor who was subject to an investigation by his employer. That led to a referral to the General Medical Council (GMC). The employment side of things was settled when he resigned and a settlement agreement was entered into. However the GMC matter continued. The claimant then made a claim of discrimination by the GMC as a qualifications body, making various complaints in relation to its handling of the matter.

The employment tribunal upheld some (but not all) of the complaints of direct race discrimination on the basis that the burden of proof had passed but not been satisfied.

The GMC appealed to the EAT.

Allowing the GMC’s appeal, the EAT held, in summary, that the tribunal had failed to engage with key aspects of its case, and so produced a decision which was not Meek-compliant; and reached some findings and conclusions at different points that were conflicting or contradictory.

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Harassment: Claimant must be aware of the unwanted conduct in order for it to amount to harassment

In Greasley-Adams v Royal Mail Group Ltd [2023] EAT 86 the EAT had to consider (amongst other grounds of appeal) whether an employment tribunal had failed in its analysis of the claimant’s claims of harassment under section 26 of the Equality Act 2020 by not having regard to conduct of which he was not aware.

The EAT, dismissing the appeal, held that only conduct of which the claimant was aware could amount to harassment. This was because:

  • the perception of the person claiming harassment was a key and indeed mandatory component in determining whether harassment had occurred
  • as confirmed by the relevant authorities, if there was no awareness, there could be no perception.

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Holiday Pay: How to calculate holiday pay on termination of employment

In Connor v Chief Constable of West Yorkshire Police [2023] EAT 42 the EAT considered the provisions of a ‘relevant agreement’ reached in relation to holiday pay on termination of employment and how these compared to the calculations provided for by the Working Time Regulations 1998 (‘WTR’) and found it not to be compatible.

In this case the Claimant’s employment contract stated that holiday pay on termination of employment would be calculated based on 1/365th annual salary. This meant, on that upon his termination, he received a lower payment for accrued holiday than that which he would have received using the calculation set-out in the WTR.

The tribunal held that the 1/365th calculation was a valid ‘relevant agreement’ under Regulation 14(3) (which states that the amount of holiday pay due on termination of employment is either that which would be prescribed if the formula set out in the WTR were applied or such other sum which is stated to be payable on termination of employment pursuant to a ‘relevant agreement’) and that therefore there had been no unlawful deduction from the claimant’s wages.

The EAT disagreed. They held that a ‘relevant agreement’ under Regulation 14(3) on the payment of holiday on termination of employment cannot result in a payment which is lower than that which would be calculated using the method set out in the WTR. The Claimant was entitled to the higher amount. . Regulation 14 provides a method of calculation for the purposes of regulations 13 and 13A for an incomplete leave year. The entitlement to annual leave, and payment, are not modified by regulation 14. The regulation provides a formula of calculation which promotes the right to annual leave and the attendant payment for holiday. The phrase “such sum as may be provided for the purposes of this regulation in a relevant agreement” refers to any agreement that provides a formula which is in keeping with the rights provided for in the regulations.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com


Back

The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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