Tapi Carpets Limited v The Commissioners for HMRC [2026] UKFTT 1128 (TC)

[2026] UKFTT 01128 (TC)Case No TC 09975
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 20, 21 and 22 April 2026Date Judgment date: 05 August 2026
Appeal reference: TC/2024/03911
VAT - whether the appellant was supplying fitting services as principal – no - appeal allowed
TRIBUNAL JUDGE HARRIET MORGANTRIBUNAL MEMBER NOEL BARRETTTAPI CARPETS LIMITEDAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Jonathan Peacock KC and Ms Susanna Mockford, of counsel, instructed by KPMG for the appellant (“Tapi”) for AppellantMs Isabel McCardle, of counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs (“HMRC”) for RespondentsDECISION

Part A - Overview

[1]Tapi is a supplier of floor coverings, including carpets. The appeal is made against assessments issued by HMRC under the Value Added Taxes Act 1994 (“VATA”) on the basis that Tapi is liable to account for value added tax chargeable under VATA (“VAT”) of a total of £13,555,315. HMRC contend that this VAT is due on the supply of services of the fitting of flooring (“the fitting service”) to Tapi’s customers who had purchased flooring from it, which took place in its quarterly VAT accounting periods from 06/19 to 12/23 (“the relevant periods”).[2]During the relevant periods, where a customer purchased a floor covering from Tapi, the customer essentially had a choice either(1) to fit the covering or arrange the fitting himself, or(2) to purchase from Tapi a floor covering fitting arrangement service (“the fitting arrangement service”) for a specified fee (“the arrangement fee”). Where a customer purchased the fitting arrangement service, (a) Tapi arranged for a fitter, who was wholly independent from Tapi but who was in a “pool” of fitters vetted by Tapi, to attend the customer’s premises physically to perform the fitting service, and (b) the customer paid the fitter the sum due for the fitting service (“the fitting fee”) when the fitter attended the customer’s premises to fit the flooring. Only scenario (2) is the subject of these appeal proceedings.[3]In summary Tapi has accounted for VAT in the relevant periods on the basis that where it provided the fitting arrangement service,(1) it acted as a disclosed agent for the customer in relation to arranging the fitting service, and(2) the fitting service was supplied by the fitter as principal. It was common ground that (a) Tapi charged VAT on the arrangement fee at the standard rate and (b) many of the fitters were not registered for VAT and did not charge VAT on the fitting fees which they received from the customers. HMRC made the assessments on the basis that in fact, in their view, under a form of sub-contracting arrangement, the fitters supplied the fitting services to Tapi and, as principal, Tapi made an onward supply of the services to customers. Accordingly, in HMRC’s view, Tapi should have accounted for VAT on the fitting fees received by the fitters at the standard rate.[4]In a small number of cases, customers specifically requested to pay Tapi direct for the fitting service when the customer entered into a contract with Tapi for the supply of flooring. In that case, Tapi considers that it supplied the fitting service and it charged VAT on the fitting fee. The evidence is that this only applies to approximately 1.2% of the orders received by Tapi for flooring. Tapi’s treatment of these “invoiced fitting” supplies is not at issue in this appeal.[5]It is common ground that, as set out in further detail below, the appellant acted as principal in the supply of the floor covering and in relation to various services it provides to its customers.[6]For the reasons set out in full in Part C, we have found that(1) for VAT purposes the fitters supplied the fitting services which were made to the customers of Tapi in the relevant periods, in return for the fitting fees, and(2) Tapi is not, therefore, liable to account for VAT on the fitting fees received by the fitters for such fitting services.

Part B - Evidence and Facts

[7]We have found the facts on the basis of the documentary evidence in the bundles and the evidence of Mr Steven Johnson and Mr Jeevan Karir who gave evidence for Tapi and attended the hearing and were cross-examined. We found them to be honest, credible and consistent in their evidence given under cross-examination. Their evidence is accepted unless stated to the contrary.[8]Mrs Crosby, the officer of HMRC who made the assessments, gave evidence for HMRC. We found Mrs Crosby to be honest and credible but most of her evidence is not relevant as it simply explains in some detail her reasons for making the decision.

Background of Mr Johnson and Mr Karir

[9]Mr Johnson has worked in the flooring business for approximately 40 years. He has been the Head of Central Operations for Tapi since July 2024. Prior to joining Tapi, he worked at Carpetland and Allied Carpets and was the Head of Retail Operations at Carpetright for 22 years. His day-to-day responsibilities at Tapi involve leading and supporting the wider business through operational input and providing effective communications across the business. He said that he takes Tapi’s strategies and goals and translates them into clear deliverable plans and has direct involvement with larger initiatives such as those relating to client accounts and new finance plans.[10]Mr Karir has over 20 years of experience in the flooring retail sector. He started as a financial analyst and later became the Director of Finance at Carpetright. He joined Tapi in July 2019. He has held a number of senior roles at Tapi including Finance Director, Chief Financial Officer (from sometime in 2021), Managing Director (from the summer of 2023) and, from January 2025, the Chief Executive Officer. In his current role, he leads the strategic direction of the business with a focus on growth, performance, and delivering exceptional customer experience. He works in partnership with the board of directors, senior leadership, and shareholders to ensure strong governance, maintain compliance and adapt the operating model to keep Tapi competitive. He said that his experience has equipped him with a deep understanding of both operational and financial levers, and a strong track record of driving growth, transformation and commercial performance.

Tapi – overview of operations and market

[11]Tapi is a flooring retailer and operates 220 retail stores in the UK. It offers various types of flooring, such as carpets, vinyl flooring, laminate flooring and engineered wood. Customers are also able to browse floorings, make enquiries and book appointments via Tapi’s website.[12]Mr Karir gave the following explanation of the UK flooring market and Tapi’s role within it:(1) It is made up of a mix of residential domestic sales direct to consumers such as to domestic homes and contract sales for commercial spaces such as offices, retail shops, hospitals and hospitality. Tapi’s focus is on the domestic sales segment, which is characterised by customers purchasing flooring for their homes (often as part of a wider home renovation project).(2) The total floor coverings market (including all segments) is worth approximately £2.1 billion per annum.(3) The different types of businesses which operate in the domestic sector include: (a) large retailers (national chains), such as Tapi, Flooring Superstore, UnitedCarpets, Wilsons Carpets, Carpets4Less and Frank’s The Flooring Store, (b) home improvement/DIY outlets (national chains), such as B&Q and Wickes, (c) online providers such as UK Flooring Direct, Flooring Supplies and Flooring Megastore, and (d) independent retailers – smaller, local flooring retailers. When combined, the independent retailers make up the majority of the market.(4) The UK flooring market has been stagnant over the last few years, with the Covid-19 pandemic, and the increased cost of living. However, it is highly competitive and heavily promotional in that across the Tapi stores, there is almost always some sort of promotion /offer available to customers, for example, “get underlay for free”, or “20% off” on a particular type of flooring. Tapi does not run promotions /offers on fitting fees.(5) The UK flooring market is not dominated by any single company. It is made up of a large number of smaller companies which compete with one another as well as a smaller number of larger national businesses, like Tapi. Given the number of competitors in the market, it is a very competitive sector.(6) Tapi’s main competitors are Flooring Superstore, United Carpets, Wilsons Carpets, Carpets4Less, Frank’s The Flooring Store, B&Q and Wickes. These retailers each have a regional or national presence but none offer the same combination of scale, and customer experience that Tapi provides. Tapi also considers the independent retailers to be competitors. Tapi’s current market share is circa 19.4%. Tapi employs approximately 1,400 people across the UK, out of which 1,300 are based in their retail network including store managers, sales advisors, home consultants and warehouse colleagues. The majority of Tapi’s customers are private individuals.[13]As Mr Johnson set out, Tapi offers a variety of services to customers, including:(1) A free measuring and planning service; whereby a Tapi surveyor attends the customer’s home and helps with measuring the space to ensure that the correct amount of flooring is purchased.(2) Arranging for a fitter to undertake the fitting of flooring purchased from Tapi. In his view that is undertaken on the customer’s behalf.(3) The provision of a delivery and care package – a bundle of additional services.(4) The provision of an interest free credit financing option on flooring purchases.(5) The removal of old flooring. A customer can request that Tapi arranges for the removal and disposal of the old flooring which has been uplifted by either the customer or a fitter. The uplifted materials are transported by the fitter back to a Tapi store/warehouse for disposal (as commercial waste). This service is available for a separate fee, calculated by reference to the square metres covered. We note that the fitter is responsible for the uplift of the old flooring as part of the provision of his service to the customer as set out below.(6) A carpet whipping/stair runners service. Customers can request their stair carpet as a runner, which would need whipping (this will include overlocking or binding the edges of the carpet). This service is available for a separate fee payable per stair.[14]Around 60% of Tapi’s customers choose to avail themselves of the fitting arrangement service and related delivery and care package. Mr Johnson described Tapi’s involvement in these elements of the services provided to it’s customers as follows:(1) Tapi is able to assist the customer in finding a suitable fitter to do the job. The customer has to engage separately with Tapi for this service and is under no obligation to use it. As part of the service Tapi (a) introduces the customer to a fitter, (b) schedules the fitting appointment and assists with any rescheduling, (c) prepares the flooring on behalf of the customer for fitter collection, and (d) assists with complaints handling, if necessary. Since December 2023, the cost of this service has been £1.00 per square metre (inclusive of VAT). Tapi applies a 20% VAT rate to the fee charged for this service.(2) A customer who uses this service benefits from Tapi’s industry experience and is able to access Tapi’s well-established network of independent fitters. It saves them the hassle of having to locate a fitter themselves and to deal with the scheduling of an appointment. Tapi is also able to help the customer in liaising with the fitter in a more productive / efficient way as they have an understanding of the industry specific language used.(3) Where Tapi provides the fitting arrangement service, the customer must also purchase the delivery and care package which includes Tapi: (a) preparing, packaging, and delivering the flooring, (b) removing a reasonable amount of furniture and replacing it afterwards, (c) a tidy-up once the flooring has been fitted, (d). removing any offcuts leftover from the installation (as agreed with the customer), and (e) eight weeks of storage from the point of order. The current cost of this package is £39 (inclusive of VAT). The cost of this package was £0.49 from 13 Feb 2019 to 11 May 2020; £0. 79 from 12 May 2020 to 11 July 2021; £0.80 from 12 July 2021 to 3 Dec 2023.(4) This package also includes a 10-year carpet fitting guarantee (“the guarantee”) where the flooring, ancillaries and underlay has been purchased from Tapi and Tapi has introduced the fitter to the customer. The guarantee relates to fitting issues only and not to any general wear and tear. Under the guarantee, and in the vast majority of cases, Tapi arranges for the original fitter to undertake any rectification of their work (at no extra cost to the customer or Tapi). If this is not possible, Tapi arranges for a different fitter to rectify the work. Any costs which are payable to the alternative fitter rectifying the work are borne by Tapi. In these circumstances, the fitters provide the work to Tapi as sub-contractor.(5) The guarantee is provided as a retail promise with the aim to provide peace of mind to the customer and maximise the chances of them returning to buy more flooring. It is mainly provided as a “booster” to the package. Based on the fitter pool which Tapi vets, and the quality of carpets which they sell, they are confident that they can offer this guarantee to give customers some comfort. Tapi does not keep records of how often the guarantee is relied upon by customers. It is difficult to quantify as they are only made aware of any potential fitting issues of any type of flooring via complaints made by customers and not all of them result in remedial work being undertaken by Tapi (most of the time the originally fitter rectifies any issues). The number of claims under the guarantee is extremely low.(6) Tapi offers a range of interest free payment options on all purchases of £500 or more (subject to various requirements). However, the financing option cannot be applied to the fitting fee as set out in the terms and conditions. Tapi’s “frequently asked questions” section relating to finance on its website states this:
“Do you offer finance options for fitting? We don't offer any finance options for fitting flooring as the installation is undertaken by independent fitters, so fitting charges are paid to them directly.”
Based on 2024 data, 19% of customers opted for a financing option. (7) Mr Johnson considers that (a) where Tapi helps the customers with finding a suitable fitter, the relationship between the parties is made clear to the customer, namely, that Tapi acts as an intermediary in introducing the fitter to the customer, (b) the fitters do not work for Tapi but are independent fitters, (c) the contract for the fitting service is between the fitter and the customer. Tapi is not a party to this contract, and (d) the fitter is not a sub-contractor to Tapi as regards the fitting service. We accept this as Mr Johnson’s genuine view of the effect of the arrangements, but we note that it is for the tribunal to determine the effect of the contractual arrangements.[15]Mr Karir explained that(1) Tapi prepares its accounts in accordance with the UK generally accepted accounting practice and turnover and costs of sales are recognised as set out in Financial Reporting Standard 6,(2) Tapi does not recognise the fitting fees paid by customers directly to the fitters as turnover in its accounts,(3) where “invoiced fitting” applies Tapi recognises the fitting fee as turnover and the amount payable to the fitters as cost of sales in its accounts, and(4) Tapi is audited by one of the big four, or one of the bigger auditing firms and the auditors have not suggested that the revenue needs to be restated in any form whatsoever in the accounts.

Services provided by Tapi - Frequently asked questions on Tapi’s website

[16]The “frequently asked questions” on Tapi’s website relating to the overall services provided to customers (including fitting), which Mr Johnson referred to, give a useful overview of Tapi’s activities:
“Do you fit flooring? We can absolutely help to arrange fitting for your new Tapi flooring. Professional independent fitters are able to fit a variety of flooring… anywhere in your home. Whether you want carpet on your stairs or laminate in your living room, they can do it all! Fitting is an additional service that’s paid directly to the fitter on the day of installation. Take a look at our fitting guide for more information [link to fitting guide], or please feel free to ask a member of Team Tapiin-store and they'll answer any questions you may have regarding our fitting service..” “Do you move furniture out of the room before fitting new flooring? Yes! If you need the fitters to move furniture out of your room(s) before fitting new flooring, that can be arranged! In general, it's best to get as much furniture out of the room as possible. If you've purchased the Delivery & Care Package, then the fitters will remove a reasonable amount of empty furniture from the room. If the furniture that needs to be removed is heavy or large and requires more than one person to lift it, please inform us when you're placing your order so we can make the fitters aware. In some circumstances, we may be able to offer a 'room clearance' service; if you require this, please ask in-store for more information on what this service entails. Please note, the fitters are unable to move electrical or plumbed in items.” “Will you uplift and remove my old flooring? Once you've placed an order with us, we can arrange for a professional independent fitter to take up your old flooring and remove it for you, too. There will be a charge for this Uplift and removal service payable to the fitter on the day of the fitting…” “What is the Delivery & Care package? We keep our prices low by being transparent and not building hidden costs into the overall price of your flooring. That’s why, if you would like us to arrange delivery and fitting for you, you will need to purchase our Delivery & Care Package for £39. The Tapi Delivery & Care Package includes: - Preparing, packaging and delivering your new flooring. - Removing a reasonable amount of empty furniture (for larger items, please clarify in store so we can prepare the team) and replacing them afterwards. -A complimentary tidy-up to ensure you can enjoy your new flooring right away! - Removing any off-cuts leftover from the installation. The fitters will do this on the day of fitting: they'll return these back to the store and we'll dispose of them for you. If you want to keep these. please make the fitter aware. Choosing our Delivery & Care package qualifies you for the 10-year fitting guarantee, which covers your flooring for 10 years from the invoice date. “Do I have to purchase the Delivery and Care package? Not at all! We want to offer you the flexibility of choosing who installs your new flooring. We recommend letting us arrange fitting with a professional independent fitter, but if you plan to it the carpet yourself or make your own arrangements, there's no need to purchase the Delivery & Care package. If you decide not to go for our Delivery & Care package, then you'll need to arrange for collection of your flooring or pay a delivery fee (from £25).” “I'm not sure if my subfloor is suitable, can you help with that? Yes, we can. The professional independent fitters we use offer a huge choice of services to help prepare your bare flooring to ensure a perfect, worry-free finish…” “Do you offer additional fitting services? From uplifting and removing your old flooring, to preparing your new subfloor with screed or ply board, our fitting partners can carry out a range of additional services if required. If you arrange to have your home measured before ordering, we can highlight any additional services you may need and discuss the options available. Many of the independent fitters we use will trim doors, but not all of them do, so please mention this to us if you need this service. We can arrange to uplift and dispose of your old flooring before laying your new flooring; however, this is an additional service which is added onto the fitting charge. We always advise customers to uplift their own flooring as it can become quite a messy job if you’ve had your flooring down for a long time!” “Do you offer door trimming? Many of the independent fitters we use offer door trimming as an additional service if it's needed, although they are unable to perform this task on fire doors for safety reasons. If you’re worried your new carpet might not fit with your current doors, please let a member of staff in-store know so we can advise you accordingly.” “Where can I get a quote for fitting carpet, laminate, or vinyl flooring? A member of Team Tapi will provide you with a quote for fitting your new flooring when discussing your flooring purchase. We’re unable to provide a quote for fitting flooring not purchased from Tapi, and we don’t fit or supply artificial grass.” “How much does fitting cost? Fitting costs have a number of varying factors such as the type of flooring, the location in which it will be fitted, and the size of the flooring being fitted. Here are the fitting costs: Carpet - £5.50 sqm Vinyl - £6.75 sqm Laminate - £15 sqm Click LVT - £15 sqm Dryback LVT - £17.50 sqm Engineered Wood - £26 sqm (This also includes a small fee for arranging the fitting with independent fitters. Minimum fitting costs also apply and rates are slightly higher inside the M25) It's best to get in contact with us directly to discuss your fitting quote either by emailing us at info@tapi.co.uk or just popping into your local store! Our fitting information page has more details.” “I have a fitting confirmation but no time slot, what should I do? Don't worry! The fitters will contact you either the day before or on the morning of your fitting to confirm your time slot. If you have any questions about your upcoming fitting, please contact your local store.” (Emphasis in italics added.)
The Tapi Delivery & Care Package includes: Carpet - £5.50 sqm Vinyl - £6.75 sqm Laminate - £15 sqm Click LVT - £15 sqm Dryback LVT - £17.50 sqm Engineered Wood - £26 sqm

Pool of fitters

[17]Mr Johnson set out the following as regards Tapi’s arrangements with fitters:(1) Tapi maintains a pool/list of fitters that it recommends to customers who use the fitting arrangement service. Currently, across all of Tapi’s store, there are about 1,200 fitters in this pool. The list of fitters is maintained at store level and fitters sometimes approach Tapi and ask to be included on the list and sometimes Tapi finds fitters via recommendations from other Tapi stores or fitters. Following the Carpetright acquisition, Tapi had a large number of fitters approach it. Tapi tends not to advertise for fitters; they typically approach Tapi.(2) To be included on the list of fitters, Tapi has the following requirements: (a) Fitters must have their own valid personal indemnity insurance. The fitters are required to provide proof of cover to the relevant Tapi store manager. (b) They must complete the “Fitter Information Form” which includes their contact details, bank details and asks whether they are VAT registered. Tapi asks for their bank details in case these are needed for “invoiced fitting”, where Tapi collects the fitting fee from the customer, for insurance purposes or for “business to business” sales. “Invoiced fitting” only happens on approximately 1.2% of orders received by Tapi. A previous version of this form, referred to a payment of £500 which needed to be made to Tapi by the fitter as a deposit against their work. This form pre-dates Mr Johnson’s time at Tapi but he understands from discussions with others at Tapi that it was collected as a mechanism to give Tapi some recourse if, for example, the fitter collected the flooring and then disappeared. In practice, these payments have not been collected since April 2022, and any previously held funds have been returned by Tapi to the fitters. (c) Fitters must complete the health and safety induction. The fitters access Tapi stores and the warehouse section and Tapi wants to ensure that they stay safe and comply with any Tapi house rules.(3) On occasions, Tapi removes fitters from the list, for example, if Tapi consistently receive bad feedback from customers in relation to a particular fitter or if the fitter frequently rejects work after initially accepting it. This is mainly to ensure that Tapi manages customer expectations. Tapi does not want to engage with fitters who do not provide a high standard of service and act professionally. However, this is usually not a problem as it is in the fitters’ interests to ensure good customer service so that the customer may contact the fitter directly for any future jobs and to ensure that Tapi keeps introducing new customers.(4) None of the fitters are employed by Tapi as employees. He said also that they are not “sub-contractors” of Tapi in relation to the provision of fitting services to customers. We note that this is a disputed point of law which we comment on in our conclusions.(5) The fitters do not wear Tapi uniforms, have Tapi name badges or any Tapi logo on their vehicles. He is aware, from his experience in the industry, that a number of fitters have their own logos on vehicles and sometimes have their own uniforms. There are some limited circumstances in which Tapi accepts that it engages fitters to act as “sub-contractors” for example (a) where there is a claim under the guarantee and an alternative fitter is engaged to rectify a fitting issue caused by the original fitter and the original fitter is unable to remedy the issue, and (b) in relation to internal deliveries (store to store).(6) Tapi does not provide any tools or equipment to the fitter and does not provide any allowances or expenses to compensate the fitter for any costs incurred in relation to the fitting services. There is no contract in writing or, in his view, verbally between Tapi and the fitters, and Tapi does not impose any restrictions or obligations on the fitters. Whether there is any implied contract between Tapi and the fitters is for the tribunal to determine but we accept that Mr Johnson’s views are genuinely held. He noted that: (a) the fitters are free to accept/reject any jobs as they see fit; (b) they are free to determine their working arrangements i.e. working days hours, (c) they are free to undertake the fitting job in the manner which they think is most appropriate, (d) they can reschedule the appointment with the customer directly (without going via Tapi). Mr Karir said that Tapi does assist with this if needed as part of the fitting arrangement service, (e) they can agree additional scope and fees for the fitting job without having to consult Tapi, (f) they are free to have similar arrangements with other flooring retailers (in his experience, most fitters work with a number of flooring retailers as well as taking on jobs where the customer has approached them directly); (g) they are free to provide the customer with their direct contact details for any future jobs; and (h) Tapi is not obligated to provide any fitter with a minimum number of jobs. Mr Karir said that fitters are responsible for ensuring they are paid the fitting fee from the customers. Any disputes concerning payments have to be resolved by the fitters themselves.(7) Tapi is not obligated to give fitters any jobs, the jobs tend to be allocated based on availability and Tapi tries to distribute the work evenly. For example, if a fitter accepts a job to fit a double hallway, stairs and landing that might take one full day. However, in the same amount of time, a different fitter could complete a couple of rooms and be paid more due to the way the fitting fee is calculated (i.e. based on area covered/metre2). Tapi tries to avoid a fitter only getting introduced for one type of job. For more complex jobs, Tapi also tries to allocate to fitters that are skilled in that area, such as for border work and stair runners with stair rods.[18]At the hearing Mr Karir said this as regards how fitters are added to the pool of fitters:(1) The decision whether to add a fitter to the pool is dependent on whether the business has a need for fitters. Tapi is a growing business and is always looking for fitters.(2) The managers are part of the process. There is a hierarchy within Tapi’s business structure: the managers report into regional managers who typically look after 15 stores and report into divisional managers. Divisional managers and regional managers are aware of where Tapi needs fitting capacity. The fitters usually provide fitting across quite a broad geographic area and across a number of stores. So, the decision to register a fitter is not taken solely by a store manager; a regional manager is involved in that process.(3) He accepted that Tapi can call upon the different levels of managers’ knowledge and experience to ensure it has a pool equipped to meet the needs for quite a large region. Many of the managers and regional managers have been in the flooring industry for a long time.(4) He said that there absolutely is some degree of vetting to get into the pool, and: “Tapi customers will want to have good quality product supplied and have an introduction to a fitter who can competently install those products. So there has to be a vetting process to ensure that we’ve got good fitters registered and available.”(5) He said that once a fitter is registered at Tapi they know what geographic area he will broadly cover and, when Tapi introduces that fitter to a customer, Tapi matches capability to the product to the customer’s requirement. As Tapi is a growing business his expectation is that fitters in the pool would quite consistently be provided with work.[19]Mr Karir made many of the same points as Mr Johnson made as regards the interaction between Tapi and the fitters. He also said this:(1) Tapi’s role in making the introduction and the fitter’s role in providing the fitting service is clearly explained to the customer. This is also reflected in the terms and conditions and other written documentation. Tapi’s retail staff also receive training to ensure that they understand the relationship.(2) Tapi exercises no control over the fitters in terms of when they work or how they decide to undertake/approach their work. It does not supervise the fitters’ work. The fitters are experts in their own field and Tapi expects them to know more about fitting than Tapi does. The only time Tapi gets involved in inspecting their work is if a customer has raised a complaint (which Tapi may be required to assist with as part of the fitting arrangement service).(3) Tapi has no responsibilities in relation to any fitting jobs, other than as part of the disputes handling (which forms part of the fitting arrangement service). The only exception to this is where the 10 year guarantee applies and where Tapi sends a new fitter to undertake remedial work which the original fitter was unable to complete.(4) Tapi has always treated the fitting service as being provided by the fitters, as the principal, to the customer. It does not account for VAT on the fitting fee on the basis that the fitting service is provided by the fitter to the customer. However, Tapi accounts for VAT on the fitting fee on the rare “invoiced fitting” occasions, where a customer has specifically requested that Tapi collects the fitting fee at the same time as the purchase of the flooring. That applies on only around 1.2% of all orders. Tapi accounts for VAT on any services where they use a fitter as a sub-contractor.[20]Mr Karir also said this:(1) In the domestic market, it is standard across the industry to have in place an arrangement whereby the retail business introduces the customer to independent self-employed fitters, with the necessary skills to help the customer with installation.(2) This type of model allows for flexibility, scalability, and clear separation of responsibility. Many customers are installing flooring for the first time and may struggle in knowing how or where to find a fitte,.(3) It makes sense for the retailer to make this introduction, as if a customer has a good overall experience from purchase through to fitting and enjoyment of their purchased flooring, they are more likely to return for further purchases in the future.(4) Tapi is uniquely placed to provide this type of service based on its experience. Tapi handle approximately 385,000 orders each year, and on around 60% of those they assist the customer with arranging a fitter. As a result, Tapi engages with fitters frequently. This ongoing interaction gives Tapi a strong understanding of the characteristics of a high-quality fitter, as well as a well-informed view of what constitutes a reasonable market rate for fitting services.[21]Mr Karir also explained that:(1) The fitters are commonly small businesses and many are sole traders. Some are VAT registered, but the majority of them are not. They are asked to confirm their VAT status when they complete Tapi’s registration form.(2) They tend to work locally and undertake fitting jobs where customers have approached them directly such as via recommendations from previous customers, advertisements in local papers or online service portals (such as CheckaTrade and Yell), and where flooring businesses have recommended a customer to them.[22]Mr Johnson and Mr Karir both said that there are seasonal variances in the volume of fitting work requested by Tapi’s customers. Mr Karir said that(1) sales tend to follow the shape of the home furnishing market with seasonal peaks in the run up to Christmas, Boxing Day sales, Easter and around bank holidays and a slowing down in the summer when the weather is good, and(2) the demand for fitting services therefore goes up and down alongside these same factors. They both said that the current arrangement allows Tapi flexibility in managing its business. Mr Johnson said that if the fitters were employed by Tapi, this would double Tapi’s employee costs and there would be periods where there would not be sufficient fitting jobs to go around. Mr Karir said that this flexible arrangement means that Tapi do not need to carry the cost of the fitter but, where there is an increased demand in fitting services, the businesses can quickly adjust and reach out to a wider group of fitters (in his view, on behalf of the customers). In his experience this type of introduction arrangement with fitters is “the industry standard”.

Pricing of the fitters’ services and process for arranging fitting

[23]Mr Johnson made the following comments as regards the pricing and charging arrangements for the fitters’ services, except where stated to the contrary, as taken from his witness statement:(1) Tapi provide the customer with an estimate of the fitting fee which is presented to the fitter when the job is offered. The fitting fee payable by the customer to the fitter is calculated based on the following factors: (a) the type of flooring, (b) the size of the room/area to be covered, (c) complexity, (d) market rates for the type of flooring and location, and (e) any additional services requested. This would include uplift of old flooring, removal of furniture (where it requires more than one person), door trimming, and sub-floor preparations (this only applies to hard flooring).(2) The “rate cards” set out the relevant fee basis for each of the services that a customer can request. It includes the amounts payable to the fitters (“Payable to Contractor”), details of when the “Fitting Arrangement Fee” will apply (“Admin price”), and the total cost to the customer (“Price to Customer (Inc Admin)”). The right-hand side of the rate card also includes the cost to the customer where the customer has requested “invoiced fitting” (which is very rare). This is an illustration of how the total cost to the customer/amount payable to the fitter is calculated, using the sample rate card for “UK Outside M25” from February 2024: Scenario 1: Customer wants 20 m2 of carpet fitted in one room and wants existing flooring to be uplifted and furniture to be removed and replaced. 1.Fitting of carpet: 20 m2 x £4.50 = £90 2. Uplift: 20 m2 x £1.50 = £30 3. Furniture removal: 1 x £25 = £25 4. Fitting Arrangement service: 20 m2 x £1.00 = £20 5. Delivery and Care package: £39 The total cost payable by the customer is £204. £145 is payable by the customer to the fitter on the day (for items 1, 2 and 3). £59 is payable by the customer to Tapi at the time the order is placed (for items 4 and 5). Tapi accounts for VAT on the sums due for items 4 and 5.(3) A minimum fitting fee may apply. The rates within the M25 are slightly higher than outside the M25. The basic fitting fee calculation (payable by the customer to the fitter) is as follows:
“market rate per m2 x m2 + additional services”. (4) The rates in the rate card for the fitting fee are determined/influenced by what fitters in general charge across all their jobs: “we go to our market, which is the 1000 fitters that we use. And then secondly, we will look at other retailers in the market who provide that product”
. In his view that means that the rates are not dictated by Tapi. Tapi is very reactive to changes in the market rates and reviews rates periodically. They consider what other retailers are using as their rates, listen to feedback provided by fitters/store staff and any particular trends and adjust their rate card accordingly. Tapi seeks to understand the market rates before updating its rate card. For example, where Tapi introduced new products, such as in relation to engineered wood, Tapi had to check what the going market rate was before it could include a rate on the rate card. Tapi may also update the rate card if it is experiencing higher volumes of rejection of fitting jobs by the recommended fitters. This tends to be an indication that the fitters are able to get higher rates elsewhere. Neither the customer nor the fitters are prevented from suggesting an alternative fee. (5) Customers may visit a Tapi store to select the relevant flooring or can do this online or can contact the call centre for advice. Tapi recommends that a Tapi surveyor visits the customer’s home (or other place) to undertake the measurements to ensure that the right quantity of flooring is purchased, and to note any other relevant details, for example, if the flooring is for staircases, if a floor cutting plan is required, and if any doors need to be trimmed. This service is provided for free by Tapi as Tapi wants to ensure that the flooring purchased is fit for purpose. A home visit increases the likelihood of the purchase going ahead. Home visits also accommodate those customers who do not want to or are unable to visit a Tapi store (as the surveyor is able to take samples with him). Sometimes a home visit is not necessary, for example, if the job is straightforward and/or if the customer has confidently taken the measurements. As part of the discussion with the customer, Tapi seeks to understand if the customer requires anything else, such as, the fitting arrangement service and delivery and care package; underlay; gripper; other additional products; any additional services required (such as uplift, removal, furniture removal, and sub-floor preparations); and financing options. (6) Tapi then provides the customer with a sales quote which includes the total cost for products and services purchased from Tapi. The estimated fitting fee payable to the fitter is included on the quote but under a separate section. If the customer is happy with the quote and decides to proceed with the purchase, Tapi finalises the sale by issuing the sales order confirmation. This could take place on the same day, or later, if the customer needs some time to consider the quote. This shows the price per line item (individual prices for each product/service) purchased from Tapi as well as a total amount, including the VAT payable. It also shows the amount paid and any outstanding balance, including the payment method. (7) On the rare occasion that the customer asks Tapi to charge the fitting fee (and hold it on behalf of the fitter) at the time when the other products/services are charged, the sales order confirmation shows the fitting fee in the same section as the other products/services purchased from Tapi and the “Amounts to pay Fitter” box shows nil. (8) Tapi also issues a sales invoice to the customer which includes similar details as included on the sales order confirmation. The applicable terms and conditions of purchase make clear that the customer needs to pay the fitting fee directly to the fitter. Similar wording is also set out on the sales quote document, the sales order confirmation and in store. It is up to each fitter to determine the method of payment, such as via bank transfer, cash, debit/credit card (via their own payment device) or cheque. The wording used in the sales quote and sales order confirmation is set out below. (9) Once the ordered flooring has arrived in store, Tapi contacts the customer to arrange the fitting appointment. Calls to customers to arrange the appointment happen daily as flooring is delivered to the stores/warehouses throughout the week. Based on the customer’s availability, Tapi finds a fitter that is available to take on the job. Any fitter approached is told about the job specifications, such as the type of flooring, the estimated time required, the location and the estimated fee. The fitter is free to accept or reject the job. For some more complex jobs, the fitter may want to speak to the customer or carry out an inspection of the customer’s home before accepting a job. If the fitter rejects the job, Tapi will reach out to a different fitter until they are able to find someone that is willing to accept the job. (10) Once the appointment has been confirmed, the customer is notified. The day before the appointment, Tapi sends the customer a reminder of the appointment. This reminder sometimes results in the customer wanting to reschedule the appointment. If so, Tapi liaises with the fitter to understand whether they are available on a different date. If not, Tapi contacts a different fitter. The fitter that was originally booked does not receive any reimbursement from Tapi for cancelled appointments. If the customer decides not to go ahead with a fitting appointment (for example if they have decided to do the fitting themselves), no fitter gets paid. (11) On the day before, or in the morning of, the appointment, the fitter arrives at a Tapi store to collect a pack of documents relevant to the particular fitting job. The pack includes: (a) a fitting sheet - which includes the customer’s contact details, details relating to the type of flooring, area covered, type of rooms, floor plans (if relevant), and accessories required; (b) an internal costing – setting out the fees as agreed; and (c) a satisfaction note – which Tapi encourages fitters to return to the store once the customer has completed it. The fitter at the same time collects the flooring, and, if applicable, relevant ancillaries, sub-floor materials (screed/ply) and underlay. Tapi has the flooring and relevant accessories ready in a designated area for the fitter in advance of his arrival. The fitter would then, using the plan, cut the flooring (using his own tools) to size if needed and loads the products into his van for onward transportation to the customer. (12) On the day of the appointment, the fitter contacts the customer to let them know the approximate arrival time and also to understand other logistical or practical requirements (such as parking, room/area access if, for example, the location is a flat). Upon arrival, the fitters tend to undertake an initial walkthrough to ensure that the job specification included on the fitting sheet is accurate. As part of this walkthrough, they might identify that additional work is required (for example, uplift/removal of existing flooring, moving of furniture, or the job is more complex). If so, the fitter may renegotiate the fitting fee with the customer. (13) If, on the day of the appointment, the customer or the fitter wants to renegotiate the scope of the work or the fitting fee, they are free to do so without involving or consulting Tapi. This could happen if the fitter discovers that the work that needs to be undertaken is more extensive (such as additional, preparatory work or removal of furniture) or more complex (such as fitting on staircases) than originally estimated. Tapi is not involved in this process and will not necessarily know about any fee changes that are renegotiated between the customer and the fitter. Tapi will only be made aware of any price changes if: (a) the fitter lets Tapi know after the event, such as if he considers the job specification was not accurate. This may be on an informal basis and usually only done by fitters out of professional courtesy, or (b) the customer lets Tapi know as part of complaining to Tapi for inaccurate fee estimates and/or as part of the customer survey which customers are asked to complete once the fitting has been completed. If the fitter and customer are unable to agree a fee for the fitting service, the fitter will leave the appointment and return the flooring to the Tapi store. Tapi will then discuss options with the customer and once agreed try and find a new fitter that will be willing to accept the job. (14) When cross-examined about the scope for renegotiation of the price for the fitting service, he said that, (a) if, for example the fitter arrives at a job and it is bigger job (for example, if there is furniture and carpet to move that he was not expecting), there would be a re-negotiation, (b) if no agreement is reached, the fitter would bring the goods back to the store and inform the store why the work had not been done, (c) it is then for the store to contact the customer or sometimes the customer would contact the store while the fitter was on the way to the store, and (d) Tapi essentially offer a new fitting date for a different price, assuming that Tapi accepts the fitter’s explanation. The customers may either accept that they have to pay additional costs because of the extra work involved, or the customer may cancel the job and ask just for the goods themselves on the basis that they will find their own fitter. If the job that Tapi has provided the price for, as set by the rate card, is exactly the same as what the fitters turned up to fit, then there should be no problem with the fitter completing the job. If there is a difference, Tapi would provide a new cost to the customer for the same job, but now accurately described, and the customer can take it or leave it. As set out below, Mr Johnson and Mr Karir gave further evidence in cross-examination about the setting of the fee estimate by Tapi and the scope for renegotiation of the estimated price which is consistent with the evidence in their witness statements. (15) Tapi sometimes offers special deals such as, as shown in the materials in the bundles, for underlay and fitting to be included in the price for selected flooring purchases over a certain price per square metre.

(a) Tapi state to the customer:

“The equivalent cost of fitting will be shown as discount from your total carpet order and has no cash alternative or value. You will have to pay the fitter directly the discounted amount upon satisfactory completion of the fitting as specified on the invoice.”, and (b) Tapi would take the value of that fitting based on the rate card off the price of the products that the customer purchases. The customer still has to pay the fitter the full price for the services that the fitter provides. (16) Once the job has been completed, the fitter asks the customer to complete a “satisfaction note”
. The fitter is encouraged to get the customer to sign this once the work has been completed and return it to the Tapi store for reference. Where “invoiced fitting” applies, fitters are encouraged to return the “satisfaction note” before Tapi will pay their invoice. Once the job has been completed, the customer pays the fitter directly unless “invoiced fitting” applies. If invoiced fitting applies, the fitter invoices Tapi for the fitting fee, and Tapi transfers the funds held to the fitter. If there are any issues in relation to the payment of the fitting fee, Tapi does not get involved and this must be resolved by the fitter. The fitter cannot claim any reimbursement from Tapi. (17) On some occasions Tapi does get involved in resolving a dispute with the customer about the fitting job. Tapi provides this service as part of the fitting arrangement service. Customers can make complaints by contacting a Tapi store or log the complaint via Tapi’s website. The type of complaints received include: (a) where the customer has had to pay the fitter more than had originally been estimated, for example, for door trimming, (b) damage has been caused to the customer’s property. Tapi advised that the original fitter had to return to the property to rectify the issue as it was his responsibility, (c) late arrival by fitter, (d) the attitude and/or appearance of the fitter, and (e) door easing which was not explained as part of the sales process. Tapi arranges for the original fitter that undertook the job to rectify the issue. On the rare occasion that the original fitter is unable to attend, or if a resolution cannot be reached between the customer and the original fitter, Tapi may send a different fitter to rectify the issue or give the customer a partial refund as a goodwill gesture against the price of the flooring purchased.[24]As regards setting the price for fitters’ services, Mr Karir said this:(1) Due to the nature of the work, flooring installation follows a fairly standard process /approach, and fitters in the same area tend to be aware of how much other fitters would charge for a similar job. In that sense, the market is very transparent when it comes to pricing of fitting jobs.(2) Were a particular fitter to charge above market rate for a particular job, without any specific reason (such as it being unusually complex), it is likely that their prices would be considered to be uncompetitive and a potential customer needing fitting would seek out a different fitter. He agreed that in terms of the fee to be paid for fitting, Tapi has good local knowledge of generally what is charged in the market.(3) Fitters are free to renegotiate the fitting fee (as Tapi only provides an estimate based on the rate card). If the fitter incurs any additional expenses, such as travel, if the customer’s home is far away or difficult to get to, these costs have to be covered by the fitter or the customer.

Mr Karir’s evidence on HMRC’s interview with Mr Brian James

[25]Mr Karir was questioned further about the pricing of fitting services and certain aspects of the fitters’ relationship with Tapi by reference to notes of a meeting between HMRC and Mr Brian James, a store manager at a Tapi store in Gateshead. Mrs Crosby explained that(1) on 8 February 2023, Tapi agreed for her colleagues, Mr Stephen Burdis, Mr Beau Brown, and her to visit Tapi’s Gateshead store on 13 February 2023 where they were met by Mr James,(2) she asked Mr James several questions to determine the fitting process used in store and these are documented in the notes of the meeting,(3) Mr James also showed them examples of sales invoices, sales orders and fitter registration forms, copies of which were taken away by her, and(4) Mr James was interviewed for about one hour, her colleague took notes and the meeting was not recorded. She did not speak to any other Tapi store managers. The notes were not sent to Tapi or Mr James to review. Anything where there was any uncertainty and anything where she needed more information, she confirmed with Mr Paul Jacobs of Tapi in follow-up emails, and telephone conversations afterwards.[26]Mr Karir’s evidence in cross-examination is as follows: (1) According to the notes: (a) Mr James was asked when the customer was first told of the price for the fitting, in store, at the point of purchase, or later and, if later, when and by who. (b) He responded that the customer is told when they are invoiced on the date of the purchase of the flooring. Mr Karir said that customers are given an initial estimate of the fitting costs when they make clear what they are looking for in their project. That quote may be generated in the home by a home consultant, or in store when products have been selected. The estimated cost of fitting is provided when the customer wants to turn that quote into “a real order”. Then the customer receives the sales order confirmation, in which the customer is again provided with an estimated cost of fitting; at that point it is not a certainty that that is the fee that the customer will pay. His colleagues have to undergo mandatory training to clearly explain that the customer is provided with an estimate. That is how it works until the fitter comes into the home and gauges his or her own opinion of the job. He accepted, in effect, that if the job is exactly as specified, given that the rate card is a reflection of the market rate for fitting, the fitter may well undertake that job for the estimated price; but the fitter has the right to renegotiate the fee if the job is not as specified and it is not a standard job. He did not accept that if a fitter ever did renegotiate the estimated fee where the job was as specified, Tapi would never use that fitter again because it would cause customer ill will. He thinks it is explained to customers that they are being provided with “an estimate, a quotation for the fitting” and that the fitter will assess the job on the day that the fitting is to take place when the fitter enters the customer’s home and they have the right to renegotiate that fee.

(a) Mr James stated that:

“Fitters cannot change the rate of fitting on the day and should match exactly what the customer receives from Tapi on the invoice”, (b) he was then asked “...if there are instances where the fitters may charge a different amount other than the one Tapi quoted” and, if so, to provide examples, and (c) he responded: “They can add an extra charge on the day but nothing to do with Tapi. This is only if the customer requests extra labour on the day from the fitter.”
Mr Karir said that Mr James is one manager at Tapi of over 200 managers and they are quite clear in that they tell their customers that what Tapi provides is a quotation for fitting. He know that there are instances where fitters may charge a different amount and what Mr James says is not accurate:
“If a fitter goes into a goes to a job and there’s a job that’s not quite as specified, it’s not quite as straightforward as what was expected, the fitter has the right to and does renegotiate the fee with the customer.”
His evidence was, in effect, that (a) the price for the fitting service is the price quoted by Tapi if the job is as described, (b) in his view that is a function of the rate card itself; it is a very good reflection of the market rate in a standard case, and (c) however, if it is a much more complicated job than the fitter thought it was going to be, such as if there is a chevron pattern in the carpet, the fitter may well renegotiate that rate with the customer. He does not know how the fitter renegotiates as he is not privy to that. (3) It was put to Mr Karir that customers are not provided with a range of different fitters, nor do they personally go and find different fitters offering different costings and Tapi selects a fitter and provides a single price for fitting as a quote. He said that Tapi matches the fitter with the skill set to the job and uses the rate card as an estimate of what the fitting cost is going to be. (4) It was put to Mr Karir that Tapi sometimes gives quotes for fitting at rates different from the local market rate. He said that (a) Tapi uses the rate card to estimate the cost of fitting. It always uses that as a benchmark, as a principle, (b) that is an internally generated document, but its actual makeup is from the feedback that Tapi get from the thousand plus fitters that are registered on their books and from their operations team keeping aware of what competitors are advertising for their fitting rates, (c) the rates in the rate card can move as demonstrated by the fact that it had to be amended to give separate rates for inside the M25; the average of a national value does not work in London because the cost of living is greater, and (d) that change was driven by the fitters; the fitters provide the best feedback mechanism in terms of the market rate. They do not fit just for Tapi; they fit for other retailers as well. So if they bring back information that says that these fitting rates are no longer commercial or viable, Tapi needs to take that feedback on board.

(b) he said:

“Yes, they are more expensive than Franks and others but if customers want the best fitting, they must pay the best price, the fitters work 5 days a week ...”
Mr Karir said that Frank’s Flooring is a budget retailer which is not directly comparable to Tapi. He accepted that the prices that Tapi quotes are in fact higher for a comparable product in the local area, because Tapi uses quite large areas to designate the appropriate rate. He said, however, that the fitters are self-employed and fit for more than one retailer so if the rate card was either too high or too low, Tapi would not generate the volumes that it does in fact generate in its stores. So commercially, it would not work if the fitting prices were too high and if they were too low, the fitters would not be willing to take the jobs from Tapi. He accepted that there is variability in fitting rates; there must be as they are a consolidation of an average market rate across the United Kingdom. The rate card is used nationally, so there is no regional variation other than for within the M25. That came back from feedback from fitters. There is no dynamic day-to-day variation of the rate card when Tapi, in any of its stores, provides a quotation for fitting rates.

(b) he said that:

“They are involved in everything. Offer 7-10 days for delivery, fitter phones ahead to organise things, at the time of sale the manager will match a fitter depending on square meterage. Fitter is notified via a job sheet the day before…. the job sheet was not used prior to 8 months ago, was completed by the store manager matching the fitting to the sales the day before the fitting was due to take place. However now the fitter is decided at the point of sale ...”
Mr Karir did not know when and why and how the job sheets were changed and the process was changed. He said that seven to ten days is generally the lead time that Tapi quotes to a customer for the goods to arrive at a store. He does not know at what point a fitter is matched to a particular job. He thought Mr James was acting like a typical Tapi manager; they are quite autonomous and care about their stores. Fitters are in and out of the stores all the time that they are matched to roles. They have conversations with managers, as the most senior authority in a store. So fitters advise managers as to their availability, and managers share potential jobs that are available that they are a good match for and can be relied upon for. He thinks it is fair to say:
“it’s a mutual relationship. I think it’s quite symbiotic. It has to be by its very nature… and I think HMRC’s own findings on the PAYE investigation found that fitters were free to choose when they work. But I think from a commercial…an operational perspective…there needs to be a symbiotic relationship where managers got a job in mind for a customer, but…a fitter is completely free to turn that down if they need - if they want to.” (7) It is recorded in the notes that (a) Mr James was asked: “If Tapi pick who takes the job, do they take into consideration how much they earn” and (b) he said: “It will depend on the fitter down” and that an older fitter gets smaller jobs, and a younger, more capable fitter gets higher square metred jobs. Mr Karir said that Tapi has to take into account the complexity of the job but he does not think ageism comes into it. It is around the complexity of a role and the relevant experience that a fitter has regarding their capability to be able to take on that job. He agreed that factors that come into play include the physical capabilities of the fitter and that Tapi does not ask the customer whether they prefer one person or another. (8) In the notes Mr James is recorded as stating that in a few stores in Yorkshire the manager buys tops for the fitters to wear on the job. Mr Karir said that his understanding is that fitters do not and are not allowed to wear Tapi uniform or any Tapi branding whatsoever. He thought it is Tapi’s expectation that once committed to doing a job, a fitter would fulfil their obligation and carry out that job. They have more fitters registered in the pool than match the volume of available work –to be able to allow for instances where fitters refuse a job. That does happen, such as when a fitter is given something more lucrative from a competitor. Tapi has to keep a big fitters pool to fill that gap. He accepted that if a fitter has accepted a job, the fitter would normally be expected to attend and do that job by Tapi, unless there is a good reason not to, like illness. He said if a fitter was constantly turning away from jobs that that he had accepted, Tapi would have to consider whether that fitter could stay in the pool, because operationally that creates a nightmare. (9) The notes record that when asked who the customer contacts to change the date and time of the fitting, Mr James said: “The store. The customer does not get any details for the fitters. Only the fitter has the details of the customer.”
Mr Karir said that the customer finds out who the fitter is going to be either the day before the fitting or on the day of the fitting and confirmed that, if the fitter cancels, Tapi has to find a new fitter for the job. The manager would take responsibility. (10) The notes record that when asked “What percentage of all sales of flooring include fitting?”, Mr James said that he guessed 90%. Mr Karir said that is wrong; it is around 60%. Mr James is recorded as stating that is because Tapi is a more high-end company and the customers who come to Tapi are on a more middle or higher-end budget and want the carpets to be fitted properly, so will pay for a complete service. Mr Karir said he thought that most customers want carpets that need be fitted to be fitted properly, and want to pay for the supply of product and to have them installed[27]In their submissions, HMRC placed some emphasis on some of Mr James’ comments as set out above. They criticised Tapi for not calling Mr James (or other store/divisional mangers) as a witness. They noted that in their statement of case they made it clear that they rely on his account in significant ways. They suggested that an adverse inference should be drawn from the failure to call him as a witness to prevent Tapi relying on evidence which is inconsistent with his comments (following the commonsense approach to such matters taken in Wiszniewski v Central Manchester Health Authority [1998] PIQR P324).[28]In our view,(1) it is not reasonable to draw any such inference given that (a) the parties are essentially free to choose who they wish to call as witnesses in support of their respective cases, and(2) the appellant has produced as its witnesses two very senior persons within Tapi, both of whom have extensive experience and knowledge of its operations, who were duly made available for cross-examination, and (2) it is reasonable for the tribunal to attach greater weight to the consistent evidence of Mr Karir and Mr Johnson (as tested under cross-examination and weighed in light of the documentary evidence) rather than the comments of Mr James, a single Tapi store manager out of over 200 managers, in particular, where his comments are inconsistent with their evidence.

Mr Karir’s and Mr Johnson’s other evidence on arrangements with the fitters and pricing

[29]It was put to Mr Karir that there is no separate contractual agreement between fitters and the customer; the only terms are those set by Tapi on its website. He confirmed that he was not aware of a distinct set of contractual terms between customers and the fitters with different terms to those on Tapi’s website.[30]It was put to Mr Karir that essentially there is no difference in what a customer receives from Tapi and the fitter in an “invoiced fitting” case, apart from as regards the payment and invoicing arrangements. He said that there is a difference. “Invoiced fitting” makes up just over 1% of their total order mix; customers do not ask for it often. It applies where the customer has specifically asked for Tapi to provide an “all in” package. Therefore, the contract is between Tapi and the customer, whereas the industry norm is to be introduced and referred to a fitter and the contract is between the customer and the fitter. He said the difference is the payment flow. He accepts that operationally the processes and the steps are same and added that “we’ve got to make sure that we account for it properly, and contractually we recognise our right. We see those as two different forms of supply”.[31]Mr Johnson was also questioned about the pricing of fitting services and the nature of the relationship between the fitter and the customer as follows: (1) It was put to him that the fitting costs are set by Tapi. He said that they are “set by the market” and they are used to give the customers an indication, to be clear and transparent to them what the costs are. He accepted that the rate card is a document drafted by Tapi but added that the content within it is “sourced by the market”. He accepted that the ultimate determination as to what goes in it is from Tapi and Tapi could choose to charge higher rates. He added:
“We could potentially double the prices and see how our turnover fall dramatically”. (2) He said that the rate card price that Tapi provide to customers gives them an “indication”
. He accepted that the message for the customer is that that is what the fee will be unless the job is bigger or different. He was shown an example in the bundles where Tapi had given the customer the price inclusive of the fee for the fitting arrangement service. He said that was done so that the customer would know what to expect in choosing Tapi; Tapi try to be clear and transparent. It was put to him that, in that instance, Tapi was saying to the customer that this is really all one package. He said Tapi were just giving a total price that the customer could expect to pay based on the rate card. (3) It was put to him that although he used the word “estimate” customers are provided with a quote. He said:
“So the contract is with us and the customer on the goods or any services that they purchase from us. The fitting charge element, which is detailed separately, is not binding until we match a fitter to that customer, based on skill set. They’re the terms and conditions for the goods and services that the customer has purchased and paid through us…They haven’t paid for the fitting service.” (4) He confirmed that a sales quote is provided to the customer either electronically or physically. He accepted that this is a quote and there is nothing stating it is an estimate, and that, provided that the job is as described, the quoted fee is the sum to be paid by the customer and this is not signed by or even seen by the fitter. He said that this is just a quotation at that stage. So no monies have changed hands at this point; “we’ve not entered into a contract with the customer”. (5) He said, in effect, that, (a) when the sales order confirmation is issued, the customer has committed to pay Tapi for the goods for the price paid and the fee stated for fitting is an estimate for the customer based on the size and the work to be undertaken, (b) Tapi have said to the customer it will act as agent for that, as it charges for that fitting arrangement service - to go and match the relevant skilled fitter to do the job, and (c) based on everything being equal, Tapi would expect the customer to pay the fitter, the stated fee. He did not accept that the fitting fee specified by Tapi is not an estimate and, at this point, the customer is committed to pay that fee provided the job is as described. He said that there is nothing binding in there; it is just an estimate: “It doesn’t state estimate there, but we make it very clear as we explain to the customer as part of the obligation we carry as their agent, to the fitter, to say that based on the assumptions of those sizes, based on the rate card, we’ve provided an estimated price for fulfilment… The customer to the fitter, to pay the fitter the [stated fee].”
He did not accept that, at this point, provided the job is as described, the customer is contract bound to pay the specified fee. He said it is an estimate at that point; and it is not binding until the fitter accepts the job:
“We haven’t matched the fitter at this point to the job. So once we do that and the fitter accepts it and accepts that price based on the available information they have” that is when he thinks there is a binding commitment. (6) He confirmed that when Tapi provides fitting services under the “invoiced fitting” arrangement it still charges a fitting arrangement fee as Tapi still has to match the right fitter to the job, based on skill set and availability. (7) He confirmed, in effect, that a pack is given to the fitter when he comes into the Tapi store or warehouse to pick up the flooring for fitting. He said that it is based on the software that Tapi’s home consultants use when they go into the customer’s home. He described Tapi as quite transparent and very open and honest with the fitters and the customers. He accepted that (a) the price shown in this pack is the price already explained by Tapi to the customer, (b) if the fitter is willing, the fitter can pick up the job for that price or not and, (c) if the fitter agrees to that price and, when he gets to the job, it is as expected, based on the rate card, Tapi would anticipate that the fitter would fulfil the job for that price. The price is based on the rate card, as taken from market analysis. He explained that fitters have the opportunity on big jobs to visit a customer’s home prior to fitting to inspect it in advance if they so wish. In that case also Tapi would provide this information to the fitter and: “If the fitter went to the customer’s home and said either yes, it matches what the requirement is, I can fit it for that price; if he turns around and says, actually, it’s going to be more on that because there’s other elements that need to be taken into account, that’s between the customer and the fitter.” (8) He accepted that there is no written contract between the customer and the fitter, but said that there is a verbal contract once Tapi have matched the fitter based on skill set and availability, and the fitter accepts the job based on seeing that the quoted job is available. It was put to him there is no such verbal contract because all the terms are already agreed as set out by Tapi and that the customer has no choice of fitter. He said: “We match the fitter based on skill set and availability for the work to be undertaken…” (9) It was put to him that the price paid by the customer is the price quoted by Tapi on the sales confirmation, assuming the job is as described. He said that the price that Tapi quote is based on the rate card and is an estimate and it is non-binding until the fitter accepts the job. He accepted that there is no further negotiation unless the job is not as described/it changes. He did not accept that there is a contract between the customer and Tapi for the provision of the fitting services (due to the terms referred to above). He said: “The price that we quote for the fitting based on the rate card is not binding until the fitter accepts…If the fitter accepts the job based on the rate card and what we’ve quoted for and there is no change, we don’t see any reason why the fitter would decline the job based on that.”

Written terms and conditions and related materials

[32]Tapi’s terms and conditions which apply to its contracts with customers were available on the website and were provided to the customers who made in-store purchases of flooring.

Materials on Tapi’s website

[33]The terms and conditions on the website included the following in the 2019 terms:
“10 year 'fitting satisfaction' guarantee on carpet Once you have chosen your gorgeous new carpet and organised all the accessories and underlay, it’s so important to make sure it’s fitted with love and care. If you have purchased your carpet, accessories and underlay from us, along with our Delivery & Care Package and let us arrange your fitter, then you will qualify for the 10 year fitting satisfaction guarantee. The '10 year fitting guarantee' only applies with the full purchase of the Delivery & Care Package, carpet, accessories and underlay is made with Tapi Carpets and Floors and when your fitting service is arranged through Tapi Carpets and Floors with one of our recommended fitters. In this instance you qualify for the '10 year fitting guarantee' and we will guarantee your satisfaction for 10 years from the date on your invoice. Please keep your receipt for proof of purchase. Carpet must stay in the original location and not be moved or tampered with and should be used only according to our recommendations. Administration Where Tapi has been asked to make the arrangements for your flooring to be fitted, we agree to act as your agent and for this service an administration fee per m2 is chargeable. The administration includes: introduction to a flooring fitting specialist and arranging the installation of your purchase under a separate contractual agreement between you and them. It also includes monitoring fitting standards, arranging a pre-cut service to aid an efficient and speedy 'at home installation', and on the rare occasion of a complaint being raised regarding the fitting, Tapi will manage the complaint between yourself and the fitting partner. We retain responsibility for the products and service Tapi supplies and will act as intermediary between you and the deliverer/ installer should any liability arise from delivery and installation where Tapi made the introduction to the fitter. The Tapi Delivery & Care Package We keep our prices low by being transparent and not building costs into the overall price of your carpet of flooring. The All Inclusive Delivery & Care package includes delivery, removing and replacing a reasonable amount of empty furniture, removing and disposing of all offcuts plus a complementary tidy up and vacuum. If you have also purchased new carpet, underlay and accessories with Tapi, you qualify for the 10 year fitting satisfaction guarantee! This means we will guarantee you are satisfied with your fitting for 10 years from the date on your invoice. Please keep your receipt as proof of purchase. Carpet must stay in the original location and not be moved or tampered with and should only be used according to our recommendations. Interest Free Credit Go on! Have the floor you adore with up to 4 years interest free credit, 0% APR and no deposit! Tapi Carpets & Floors can offer interest free options from Barclays Partner Finance on all purchases £500 or over. It's quick and easy and you'll have a decision in minutes! You can choose to spread your payments across either 12, 24, 36 or 48 months interest free instalments. This does not include the cost of fitting your flooring as this work is carried out by 3rd parties. Promotions Tapi Bundle: Underlay and Fitting included in the price The cost of underlay and fitting is included with selected carpets purchases over £14.99m2, that are clearly identified in store and online as the Tapi Bundle. The value of the underlay and fitting has no cash alternative or value. The underlay supplied should be an appropriate square meterage to the carpet and the offer applies to all carpet underlay. Fitting excludes all forms of sub floor preparation, only covers the basic rate of fitting and applies to standard domestic wooden stairs only. Offer excludes fitting to open plan stairs. The Tapi Bundle is not valid in conjunction with other offers, previous quotes and 'We Beat Any Quote' price matches. IFC applications will be based on net value of order after saving has been applied. Free fitting available. The equivalent cost of fitting will be shown as discount from your total carpet order and has no cash alternative or value. You will have to pay the fitter directly the discounted amount upon satisfactory completion of the fitting as specified on the invoice. £34.99 Delivery and Care service charges apply. Not valid in conjunction with any other offer.”
Administration The Tapi Delivery & Care Package Interest Free Credit Promotions

Tapi Bundle: Underlay and Fitting included in the price

[34]The terms and conditions from 2020 included this: “Your order - Important Customer Information Thank you for placing your order with Tapi. This order is a legally binding contract even if you have only paid a deposit and under this contract you and we have rights and obligations. You should check the details of your order carefully including these terms and conditions which also apply, and if you have any queries please raise these immediately with the store. What’s included in the Tapi Delivery and Care Package? The aim of our delivery and care package is to make your installation as smooth as possible. Within this package we include the delivery of your order, the removal and replacement of a reasonable amount of emptied furniture and the removal and disposal of off-cuts. In addition, we provide a complementary vacuum. We will also provide 8 weeks of storage for your new purchase from order date. Not included within this package is the uplift or disposal of your old flooring although these services can be purchased separately. Whilst we will move a reasonable amount of emptied furniture, we are unable to move items such as grand pianos or the like for obvious reasons as well as white goods! We will need to be made aware, at the time of purchase, if any items require more than one person to be moved safely. The customer utilises the assistance of the fitting partner for the movement of furniture at their own risk and the fitting partner is not liable for any accidental damage which may occur during the movement of your furniture. Sub Floor Preparation ….If we are arranging the installation of your flooring, our fitting partner may advise that some remedial work is needed such as smoothing compound or ply boarding before the new floor can be fitted. This may delay the original installation of your flooring whilst this work is undertaken. Uneven floorboards and surfaces, if left uncorrected by the customer, can affect the appearance of your new flooring by being seen through to the surface. In the majority of cases a fee may apply. It may, on the rare occasion, be necessary to involve the services of a specialist contractor… … Fitting Fitting is chargeable. Where carpets are to be fitted in in the hall and stairs an additional fee may be made to reflect the additional fitting work involved in these areas. These charges may be payable to the company or the contractor and are shown on your sales confirmation or invoice. The fees quoted are for the goods shown on the order only. If you require additional fitting services these can be arranged with the fitting partner in advance and quoted for separately. Please discuss these with the store staff prior to the fitting appointment E.g. Door easing, whipping (the process of stitching the edges of the carpet with a yarn edging to prevent these from fraying), waste removal and uplift. Fitters undertake to carry out their work with reasonable skill and care, but on rare occasions home decor may be marked or scuffed during the fitting process. New paintwork and wallpaper are especially vulnerable and should be allowed to dry fully. A minimum of 72 hours is recommended and when high gloss paint has been used please allow 7 days. Neither we nor any fitting partner undertakes to carry out any redecoration, except where damage has been caused by that person's negligence. Doors may need to be trimmed to allow sufficient clearance. This is not considered to be part of the fitting work unless this was specifically agreed in advance. Fitters may need to remove doors to facilitate fitting and where necessary, leave them ready for you or your appointed carpenter to carry out the trimming and rehanging at a later date. Some doors, such as fire doors, may not be suitable for modification or need to be carried out by a door easing specialist… … Administration Where Tapi has been asked to make the arrangements for your flooring to be fitted, we agree to act as your agent and for this service an administration fee per m2 is chargeable. The administration includes: introduction to a flooring fitting specialistand arranging the installation of your purchase under a separate contractual agreement between you and them. It also includes monitoring fitting standards, arranging a pre-cut service to aid an efficient and speedy 'at home installation', and on the rare occasion of a complaint being raised regarding the fitting, Tapi will manage the complaint between yourself and the fitting partner. We retain responsibility for the products and service Tapi supplies and will act as intermediary between you and thedeliverer/ installer should any liability arise from delivery and installation where Tapi made the introduction to the fitter. (Emphasis added.) The highlighted passages are those on which the parties particularly place reliance as explained below. What’s included in the Tapi Delivery and Care Package? Sub Floor Preparation Fitting

Administration

[35]In a webpage specifically relating to fitting, this is stated:
“We'll arrange fitting Just sit back, relax and let our professional fitting partners install your new flooring. Carpet fitting, along with [other flooring] installation, is a job best left to the experts. We’ve a little black book of professional fitters throughout the UK, and we trust them to fit your carpet or flooring quickly, efficiently, and perfectly. They’ll also take away your offcuts and give your new flooring a vacuum so it’s ready for you to enjoy straight away. Of course, you’re more than welcome to use your own carpet or flooring fitter - the choice is yours! At Tapi, a quote for new flooring is completely tailored to you so you only pay for the services you need. How much does fitting cost? Our fitting costs vary depending on the size of your room, where the floor is to be laid and the flooring type being installed. Prices start from £5.30 per m2 for carpet. As we use independent fitters, the cost for fitting is payable directly to the fitter on the day of installation. Take a look at the table below for some indicative costs by room size. The costs include a small fee for arranging the fitting with our professional fitting partners. Minimum charges apply, as do supplements in some locations (e.g. London) and for complex fitting (e.g herringbone. stairs). Ask one of our colleagues to provide you with a tailored estimate based on your requirements [Table of estimated costs.] How it works Our flooring experts will ask if you need your new flooring fitted when they are putting together a full quote. If the answer is yes, you’ll receive a very excited email from us when your new flooring has arrived in-store, asking you to give the store a call to arrange a convenient fitting date. You'll then receive a confirmation email with your fitting date and the countdown to the floor of your dreams has begun! What can I expect on the day? The day before installation we'll send an email reminding you that your new flooring is going to be fitted tomorrow - as if you'd forgotten! A friendly fitter will arrive at the allotted time, which will be confirmed the day before, leaving you to relax while we take care of everything_ As part of our Delivery & Care package, the fitters are happy to move up to 5 pieces of empty furniture. Unfortunately, they won’t be able to move plumbed or wired items, or really heavy items like pianos or pool tables. Please let us know if any items require two people to move them, so we can ensure sufficient help is at hand. What fitting services do you offer? Our fitting partners offer a huge array of additional services to help get the perfect fit. From fitting your new carpet or flooring with underlay and accessories, to uplifting and removing your old flooring, Tapi can offer you a quote and arrange for a fitter to carry out these works for you. At Tapi no mountain is too high. Just ask for these services at the time of ordering • Fitting Whatever flooring you’ve chosen, be it carpet, vinyl, laminate. or LVT, our fitters have the skills and experience to get a perfect fit. They’ll also lay underlay and accessories like door bars, grippers, or stair rods. Fitting a new carpet can be done in as Quickly as 30 minutes! Now that’s speedy! • Uplift & Removal Before your new gorgeous new carpet or flooring can be fitted, your old floor needs to be removed. It’s a messy and pretty dusty job but our fitting partners are happy to get stuck in! We charge £4.50 per metre for uplift and disposal. a small price to pay for stress-free installation. • Subfloor preparation A perfect new floor needs a smooth, solid foundation. From installing a DPM (damp proof membrane) to preparing your subfloor with ply board, screed or a latex smoothing compound, our fitting partners can get your subfloor ready for your new floor. We'll assess the condition of your subfloor when we visit your house to measure up and clear: you know if work needs doing. • But it isn’t always possible to inspect what's underneath your current floor sufficiently enough to diagnose where some preparation work is needed prior to your new flooring being laid. If our fitting partners are installing your new floor and they do find that what’s underneath your existing floor needs work to make it right, in the majority of cases, they can help you resolve the problem. But there may be rare occasions where they advise you to bring in the services of a specialist contractor. Uneven floorboards, if left uncorrected, can adversely affect the appearance of your new flooring. • Door easing There are times when your doors may need some height adjustment easing. For example, if you go from a smooth floor to a thick, luxury carpet. At Tapi, we do our best to help and some, but not all, of our fitting partners, can trim standard doors. However, fire, glass. panelled, hollow and chain doors would be best left to specialist carpenters. Let us know the type of doors you have so we can help with the best solution. Some of our showrooms can recommend local carpenters that are on hand to help too. • Carpet whipping We can make any carpet into a rug or stair runner. Let us know the size you need and we’ll whip it into shape with our carpet whipping service! This specialist skill involves taping the edge of the cut carpet with a single, double. or piped border. in a variety of materials such as cotton, linen, and faux leather. This is also a great way to use good size off cuts from your new carpet to make little protective entrance mats that match. Ask your local Tapi store for details. 10-year fitting guarantee When your carpet. accessories and underlay are all purchased from Tapi Carpets and Floors and when your fitting service is arranged by us with one of our recommended fitters, you Qualify for our 10-year fitting guarantee. Hurrah! This means that should you encounter any issues with the installation within 10 years from the date on your invoice, we’ll rectify them free of charge. Please keep your receipt for proof of purchase. Your flooring must stay in the original location and not be moved or tampered with and should be used only according to our recommendations. You can read more about our 10-year fitting guarantee here. Can I fit flooring myself? If you want to try fitting your new flooring yourself, go for it. You’ll need a few tools and some take longer than others, but it’s a great way to learn a new skill. Our handy expert guides will give you simple step-by-step instructions on how to fit your new carpet, laminate, vinyl, or LVT Did we answer all your fitting questions? If not. take a look at our fitting FAQs.”
How much does fitting cost? [Table of estimated costs.] How it works What can I expect on the day? What fitting services do you offer? • Fitting Whatever flooring you’ve chosen, be it carpet, vinyl, laminate. or LVT, our fitters have the skills and experience to get a perfect fit. They’ll also lay underlay and accessories like door bars, grippers, or stair rods. Fitting a new carpet can be done in as Quickly as 30 minutes! Now that’s speedy! • Uplift & Removal Before your new gorgeous new carpet or flooring can be fitted, your old floor needs to be removed. It’s a messy and pretty dusty job but our fitting partners are happy to get stuck in! We charge £4.50 per metre for uplift and disposal. a small price to pay for stress-free installation. • Subfloor preparation A perfect new floor needs a smooth, solid foundation. From installing a DPM (damp proof membrane) to preparing your subfloor with ply board, screed or a latex smoothing compound, our fitting partners can get your subfloor ready for your new floor. We'll assess the condition of your subfloor when we visit your house to measure up and clear: you know if work needs doing. • But it isn’t always possible to inspect what's underneath your current floor sufficiently enough to diagnose where some preparation work is needed prior to your new flooring being laid. If our fitting partners are installing your new floor and they do find that what’s underneath your existing floor needs work to make it right, in the majority of cases, they can help you resolve the problem. But there may be rare occasions where they advise you to bring in the services of a specialist contractor. Uneven floorboards, if left uncorrected, can adversely affect the appearance of your new flooring. • Door easing There are times when your doors may need some height adjustment easing. For example, if you go from a smooth floor to a thick, luxury carpet. At Tapi, we do our best to help and some, but not all, of our fitting partners, can trim standard doors. However, fire, glass. panelled, hollow and chain doors would be best left to specialist carpenters. Let us know the type of doors you have so we can help with the best solution. Some of our showrooms can recommend local carpenters that are on hand to help too. • Carpet whipping We can make any carpet into a rug or stair runner. Let us know the size you need and we’ll whip it into shape with our carpet whipping service! This specialist skill involves taping the edge of the cut carpet with a single, double. or piped border. in a variety of materials such as cotton, linen, and faux leather. This is also a great way to use good size off cuts from your new carpet to make little protective entrance mats that match. Ask your local Tapi store for details.

Can I fit flooring myself?

[36]Terms from 2023 include this:
“What does the Delivery & Care Package include? Our Delivery & Care Package does exactly what it says on the tin: we’ll deliver your flooring directly to your door, as well as take care of a few little other things to ensure your fitting is hassle-free. The Tapi Delivery & Care Package includes: Preparing, packaging, and delivering your new flooring. Removing a reasonable amount of empty furniture and replacing them afterwards. (For larger items, please clarify in store so we can prepare the team in advance.) A complimentary tidy-up to ensure you can enjoy your new flooring right away! Removing any offcuts leftover from the installation. The fitters will do this on the day of fitting; they’ll return these back to the store and we’ll dispose of them for you. (If you want to keep these, please make your fitting partner aware.) 8 weeks of storage from the point of order. How much is the Delivery & Care package? Our Delivery & Care package costs £39, no matter where you are in the UK or how big your order is. Do I have to get the Delivery & Care package? Not at all! We want to offer you the flexibility of choosing who installs your new flooring. We recommend using one of our trusted Tapi fitting partners and our free measuring service, but if you’re planning to fit the carpet yourself or making your own arrangements then there’s no need to purchase our Delivery & Care package. If this is the case, you’ll need to arrange for collection of your flooring or pay a delivery charge from £25.”
The Tapi Delivery & Care Package includes: A complimentary tidy-up to ensure you can enjoy your new flooring right away! How much is the Delivery & Care package? Do I have to get the Delivery & Care package?

In-store materials

[37]In store materials included the following statement which corresponds to the very similar statements in the terms and conditions on Tapi’s website:
“Administration Where Tapi has been asked to make the arrangements for your flooring to be fitted, we agree to act as your agent and for this service an administration fee per m2 is chargeable. The administration includes introduction to a flooring fitting specialist and arranging the installation of your purchase under a separate contractual agreement between you and them. It also includes monitoring fitting standards, arranging a pre-cut service to aid an efficient and speedy at-home installation, and on the rare occasion of a complaint being raised regarding the fitting, Tapi will manage the complaint between yourself and the fitting partner. We retain full responsibility for the products and service Tapi supplies and will act as intermediary between you and the deliverer/installer should any liability arise from delivery and installation where Tapi made the introduction to the fitter. Fitting is chargeable and payable to the fitting partner separate from your Tapi contract and must be paid directly to the fitter on the day of the installation.”
[38]Mr Johnson explained that the arrangement between Tapi, the customer and the fitter is made clear to Tapi’s staff – to ensure the arrangements are clearly communicated to all parties. He exhibited an extract from Tapi’s staff retail store training module which is mandatory training for all retail store staff. This included the following statements which the staff were to say to customers:
“The contract for installation is between the customer and the fitting partner and is not part of the Tapi contract …” “Please take the time to read through our company terms and conditions – any questions should be directed to your line manager.”
[39]Mr Johnson also exhibited a “strut card” which is displayed in the stores, in two to three customer facing locations, which includes the fitting section from Tapi’s “FAQs”: Mr Johnson confirmed that this “strut card” was not in use until 2025 and that it is essentially a piece of cardboard that stands up in the shop setting out deals to the customer. He said it is customer-facing, but also is intended to be used as a prompt for store colleagues to refer to: (1) It states:
“We do everything to ensure you’re delighted with your new flooring…We have a choice of experts to help you, from delivery to installation and we pride ourselves on an excellent after-sales service.”
He said this is not just around the fulfilment of the fitting. There is also post fitting follow-up. (2) It states:
“We have a choice of experts to help you, including installation.”
It was put to him that here Tapi is there telling customers that those experts, including fitters, are acting on behalf of Tapi. He said:
“where we’re instigated as the agent to match a fitter to the customer’s order”. (3) It also states: “Many of our specialist services come at no extra cost, some are chargeable, but all are delivered to the highest possible standards.”
It was put to him that this is telling the customers that services, including the fitting/installation, are Tapi's services and Tapi are holding out that all of those services, including the fitting, are delivered to a particular standard. He disagreed. He said:
“we offer - as experts in selling flooring, that’s what we do: we give the customer the confidence they’re selecting the right product. We vet the fitters to offer -- to match the best fitter and skill set and availability to the job. So do we have a part to play? Yes. But only in that original setup and acting on behalf - as an agent, on behalf of the customer to set that service up.”
In HMRC’s view, whilst the strut card was in use after the relevant periods, it shows that Tapi continued to explain its contractual terms in a way that is inconsistent with Tapi acting as an agent as regards the fitting service. Sales quotes and sales orders[40]The bundles contain examples of sales quotes, sales confirmations and invoices: In the sales quote and sales confirmation, the fitting service and fitting fee for it are separately identified from other services and fees as follows: Sales quote:
“FITTING SERVICE Fitting services are carried out by Independent Fitting Contractors. As we use independent fitters, the cost for fitting is payable directly to the fitter on the day of installation. Amount to pay Fitter £187.20
Sales order confirmation:
“FITTING SERVICE Fitting services are carried out by Independent Fitting Contractors. As we use independent fitters, the cost for fitting is payable directly to the fitter on the day of installation. Amount to pay Fitter £ 187.20 Customer Signature The Fitting Charge is payable directly to the fitter on satisfactory completion of the work Other information Doors may need to be trimmed to allow for sufficient clearance, but this is not considered part of the fitting service unless discussed in advance. Customers with fire doors will need to arrange specialist contractors.”
[41]The bundles also contained examples of sales invoice in which there is no mention of the fitting fee or the fitting service itself.

Written communications by Tapi with the customers

[42]The bundles contained examples of the standardised emails and SMS notifications which were sent to customers automatically by Tapi. They each conclude with a “sign-off” by Tapi with a message such as “All the very best, Tapi” or “See you tomorrow! Tapi”:(1) Customers received an email and SMS to confirm their fitting date which states “your appointment is officially in the diary and your fitter will be there to fit [the flooring]”. It goes on to say, “we look forward to seeing you very soon”.(2) Tapi sent an email and SMS reminder to the customer a day before the fitting (or sometimes on the day of the fitting) which states:
“your fitter will contact you either later today or tomorrow morning, to confirm they will be arriving tomorrow”
. It states: “If you haven’t yet arranged to use our uplift and removal service, it’s not too late. Just give us a call on as soon as possible and we’ll give you a quote and arrange this additional service for you” and “as part of our Delivery and Care package, we’re happy to help remove a reasonable amount of empty furniture..”. (3) If the customer was out when the fitter arrived, Tapi sent an email notification which states that “we popped by today to fit your new flooring…we’d be happy to rearrange your fitting…give us a call…and we’ll get you booked in right away. Otherwise we’ll be in touch soon to get everything sorted.” (4) When the customer rearranged the fitting, Tapi sent an email and SMS notification confirming the new fitting date which states “thanks so much for re-arranging your fitting. We’re really looking forward to installing your new flooring…Tapi [store name] will be taking care of everything for you…And we’ll see you on…”. (5) HMRC also referred to an information email with the heading “some things you should know, before we show” which refers to “our fitters” in a number of places. For example it states: “we would ask all areas are fully dry…our fitters will do everything they can to avoid scuffing”; “let our fitters know if you have loose floorboards”; “let our fitting partner know [if you want to keep offcuts]”.[43]Tapi noted that(1) whilst there are some references to Tapi in these communications, these are accompanied by references to the fitting partner arriving, contacting the customer, and performing the work, and(2) these communications are all sent after the customer has agreed to engage Tapi to provide the fitting arrangement service on the terms and conditions set out above.[44]Mr Johnson said in his witness statement that(1) he was aware that some of the language used previously on Tapi’s website and in other documents may not be as clear in explaining the relationship between Tapi, the fitter and the customer in relation to the fitting of the flooring,(2) this is “customer facing language” which Tapi uses to provide customers with confidence in their choice of asking Tapi to recommend a suitable fitter, and(3) Tapi has recently attempted to clarify the language used on its website to more accurately reflect Tapi’s view of the contractual arrangements.[45]Mr Karir was questioned about aspects of the communications referred to above as follows:(1) As regards the reference to an uplift and removal service, he said the uplift element is provided by the fitter and Tapi is responsible for the removal as Tapi disposes of the uplifted carpet. He accepted that right from the start of these emails Tapi does not make clear that it considers that some of the services it refers to are supplied by somebody else. He said this is customer-friendly, customer-facing language to give customers an idea of the services that Tapi provides and what services Tapi can facilitate or provide on their behalf. He agreed he was not trying to mislead any customers in these emails and said again they are marketing, customer-friendly messages.(2) He said that if a customer elects for the uplift of their carpets only, then the fitter is paid directly by the customer and the fitter uplifts that carpet and places it wherever it needs to go in the customer’s home. He said in effect that references to “us” and “our” is a reference to Tapi in their role under the fitting arrangement service as facilitators and coordinators. If the customer elects for uplift and removal, the fitter will then load the removed goods onto his van and bring that back to the store, probably to the yard for a Tapi member of staff to dispose of it as part of the delivery and care package. He accepted that moving some items of furniture, as long as it is reasonable, is part of the service which Tapi supply. He said that moving furniture and vacuuming after a fit, is something that Tapi use in marketing messaging to give the customers a real expectation of what they should be getting, as many of them are buying floor coverings for the first time. But it is something that fitters do as standard. Internally, Tapi see the delivery and care package as essentially made up of three items. The first is the value that customers are really paying for and is the element that only Tapi can provide – the disposal of commercial waste the offcuts and the storage of the carpet for up to eight weeks. The second element is what fitters do as standard across the industry. If a customer were to buy a floor covering elsewhere, moving furniture and vacuuming is what they would want to happen anyhow. The third element is the customer assurance side, which is the ten-year fitting warranty.(3) He accepted that, looking at it in isolation, the email confirming the fitting date gives the full impression to the customer that Tapi provides what the email refers to. He said, in effect, that this shows Tapi fulfilling their obligation under the fitting arrangement service.(4) It was put to him that in these communications Tapi does not make any distinction between the fitter and Tapi. He said again this is a customer facing language. He thought the language very early on in that process indicates that Tapi can, as part of its obligation under the fitting arrangement service, facilitate the fitting for the customer. In his view it is perfectly reasonable to expect a customer to have the reassurance from the brand that “we’ve got you covered, that we’ll look after you during that journey”.(5) As regards the information email when it was put to him that “us” is Tapi but the fitter discharges Tapi’s obligations under the delivery and care package to move furniture, he said, in effect, that it is necessary to look at the whole process. When a customer buys that package, his colleagues, who undergo quite extensive training to cover these elements, would inform the customer that “we’ll move up to five pieces of furniture” but it is within limits. This is acting as a reinforcement message around:
“you’ve asked for an uplift. If you’ve asked for an uplift, that entire room is going to have to be clear”
. If there are only say five pieces of furniture in there, the customer would have made the store aware of that as part of that journey and the fitter would be aware of what they are coming into. And quite often, there are notes recorded on the sales orders, which is why Tapi have free texts that allows store colleagues to capture the level of effort or labour required. (6) Some of the messages state:
“Please note if you don’t arrange [the uplift and removal service] with us you’ll need to remove and dispose of your old flooring yourself before we arrive…See you tomorrow. [Tapi].”
He accepted that the only person who was going to arrive is the fitter. It was put to him that the customer sees in this message that the fitter will provide services which Tapi has committed to provide. He disagreed. He thinks the customer sees Tapi’s commitment to provide a joined-up customer experience and the “we” element is the part that provides the assurance to the customer and relates to Tapi’s obligation under the fitting arrangement service. He said that there are many steps before customers commit to making a purchase, they were provided with the quotes, they were told at that point that fitting is carried out by an independent third party and when that is turned into an order, the same point is reiterated. Tapi clearly point out the terms and conditions that shows the contractual side of this process. The language used in this message is “classic customer-facing language which needs to be reassuring”. (7) It was put to him that in the message regarding re-arranging a fitting date Tapi tells the customer:
“We, Tapi do the fitting”
. He said that this is telling the customer that Tapi are taking group responsibility. He said that shows Tapi following through on the fitting arrangement service commitment. He accepted that the messaging is quite clear: Tapi provides a seamless service to the customer. It was put to him that it gives the impression of a one-stop shop:
“We can cover all your needs arising from wanting a new fitted carpet”
. He thought that is partly fair and said that: “we do want to be someone that provides a joined-up customer experience from the point of enquiry through to installation. I think the legal definition is in the terms and conditions”.[46]It was put to Mr Johnson that in various places and in statements such as “We’ll arrange fitting”, Tapi’s website and email communications with customers do not make clear what services are provided by Tapi to the customer and what is provided by anyone else such as (so Tapi asserts) the fitting service by the fitter to the customer: (1) He said:
“This is customer-facing language…we try and make sure that we give a seamless customer journey, and as part of that, the customer-facing language…I accept can be unclear from that perspective”. (2) As regards the statement that: “If you require additional fitting services these can be arranged with the fitting partner in advance and quoted for separately”, he said that (a) this refers to the fact that where the customer chooses to take Tapi on as their agent to find a fitter, Tapi can arrange matters such as furniture removal and uplift on behalf of the fitter through the rate card, as the agent, and (b) that would be arranged through a discussion with the customer in store or in the customer’s home, when Tapi measure the flooring. (3) He did not accept that in the statement that “our fitting partner” can supply uplift and other services Tapi tells customers that this service is one of “our”, meaning one of Tapi’s, services. He said that “it is customer-facing language”
. He accepted again that could be unclear but said that the sentiment is there to give the customer the right experience. (4) He was taken to a communication with a customer which includes a reference to “installed by us”, “fitted by one of our recommended fitters”, and “If you have purchased your carpet, accessories and underlay from us, along with our Delivery & Care Package and let us arrange your fitter ... your fitting service is arranged through Tapi Carpets and Floors with one of our recommended fitters”. He said that refers to the case where the customer has asked Tapi to act as their agent on their behalf and match a fitter with the right skill set for the job. (5) He was taken to the email confirming a fitting appointment. He said this contains customer facing language and Tapi is just trying to be clear to the customer as part of the customer’s journey. He did not accept that a customer would understand from that that the fitter is part of Tapi or acting for Tapi. He said Tapi make it clear both in store through their learning development programme and in the customer’s home, if Tapi measure, in its relationship with fitters Tapi acts as agent. It was put to him that none of that is made clear and Tapi and the fitter are merged as one in this message. He said:
“In there, as I’ve said before, in hindsight, could it be clearer? Probably.” (6) He was taken to an extract from Tapi’s website from December 2023 which states “Our services…10-year Fitting guarantee”
. It was put to him that right at the end the relevant period, Tapi was telling customers that the fitting is “by us”, Tapi. He made the same comments about this being customer-facing language. (7) He was taken to the “frequently asked questions” page on Tapi’s website and it was put to him that much of this suggests that Tapi provides services such as the fitting and there is no reference to customers entering into a contract with fitters and nothing to indicate to customers that (so Tapi asserts) the fitters sometimes make supplies themselves and sometimes act on Tapi’s behalf. He said again, in effect, that this is just customer-facing language, which tries to make it as simple as possible for the customer, so they get to understand the whole journey that is available to them. He accepted that it does not say anywhere in this material:
“We only act as an agent in relation to the fitters. You have to enter into your own contract”
. He said it did not at that point; the language was used to be customer facing, and to give the customers the comfort that the service is available and provided, if they so choose. (8) In re-examination Mr Johnson was taken to statements on Tapi’s website that (a) “Do you fit flooring?....Whether you want carpet on your stairs or laminate in your living room, they can do it all!...Fitting is an additional service that’s paid directly to the fitting partner on the day of installation.”. He confirmed that describes what he understands to be the relationship between the customer and the fitter, and (b) “Do you fit flooring?... From uplifting and removing your old flooring, to preparing your new subfloor with screed or ply board, the fitters can carry out a range of additional services if required.” He confirmed that this refers to the professional independent fitters that are identified in the earlier comments on the website.

Provision of different services

[47]Mr Karir and Mr Johnson were questioned about a number of aspects of the services provided by Tapi and the fitters in the context of the terms and conditions on Tapi’s website and statements in communications with customers.[48]As regards the guarantee:(1) Mr Karir said that the guarantee is designed by its concept to be a brand assurance/ reputational tool. It is designed to give customers assurance that if they buy a product from Tapi and they buy the associated ancillaries and they use one of Tapi’s vetted fitters, Tapi will stand behind the longevity of the installation.(2) It was put to Mr Johnson that in making the statement that Tapi are “delighted to offer a ten year fitting guarantee on all carpets purchased from and installed by us.”, the clear message to the customer is that in fact Tapi does the installation/fitting. He said this is customer-facing language:
“The flooring is purchased from us, it’s installed by the fitters, but as part of that customer-facing language, we’ve just tried to make it as customer friendly as possible”
. When it was put to him there is no reference to any agency he said there are further details on the website in the legal terms and conditions.[49]It was put to Mr Karir and Mr Johnson that(a) various of the contractual terms show that Tapi undertakes to the customer to ensure that various standards are met as regards the fitters’ activities, and(b) there is no distinction drawn in the relevant communications between what the fitter undertakes to do and what Tapi undertakes to do: (1) It was put to Mr Karir that the reference to Tapi “monitoring” fitting standards shows that Tapi does not just offer to match a fitter and a customer but also takes steps to ensure that a reasonable standard of fitting is met. He said, in effect that Tapi does not monitor fitting standards through supervising the fitter directly but rather through the customer feedback loops in place. So, for example, (a) whenever a fitting is completed, it is mandatory for someone in the store to do a “happy call” to make sure that the fitting was completed, that the place was left tidy and that the customer is happy with the product, (b) they also have Trustpilot as a mechanism, although that is more effective before fitting, to get an idea of the sales process, and(c) they have “SurveyMonkey”, from which they measure their “brand net promoter score”, and part of that is focused on the fitting experience. These are the effective tools that Tapi use to monitor standards. (2) As regards the statement in the terms that waste removal can be arranged with a fitting partner in advance, Mr Johnson accepted that the fitter does not supply that service. The fitter may physically do it, but Tapi provides the waste removal. The fitter physically removes the carpet and brings it back to Tapi, Tapi provide the skip and subcontracts with someone who supplies skips to take it to a landfill or similar. (3) As regards the various elements of the delivery and care package: Mr Karir accepted that Tapi supplies/is contractually obligated to deliver flooring, move and replace a reasonable amount of furniture, remove offcuts, tidy up and vacuum but the fitters physically provide these services to the customers. Mr Johnson also accepted that when questioned about the vacuuming service. Mr Karir said that fitters are independent third parties and, across the entire industry, it is reasonable to expect a fitter to collect goods from the seller and take those to a customer’s home. He accepted that ultimately Tapi was committed to ensuring delivery takes place. He said that the fitter bags up the off cuts and brings them back to the Tapi stores on one of their frequent visits, ready to be disposed of. Tapi controls and manages the skips. He confirmed that the fitters are not paid anything separate/extra for doing these tasks. (4) It was put to Mr Johnson that when, in the terms from 2020, Tapi states:
“The aim of our delivering care package is to make your installation as smooth as possible”, Tapi is saying that it has the ability to control the smoothness or otherwise of the fitting. He said: “it’s down to the customer language. We facilitate, with the delivery and care package, the ability to give the customers complete visibility of what’s included, what we will provide, either through Tapi - because there’s elements that we do with the disposal element, the ability to have a clean warehouse for the fitters to cut up -- and then there’s elements that the fitters will do as well. So there’s a mix of both there, that delivering care package is across the piece.” (5) It was put to Mr Johnson that in the statements regarding the delivery and care package that “we” (being Tapi) would move furniture, provide complimentary vacuuming and storage, the message is that the fitter is the human being that performs these services, but Tapi provides the services. He said it could be argued some of the areas are slightly unclear. However, it’s customer-facing language and this shows the expectation from both parties as regard the things that they will do. So Tapi are trying to be clear with the customer and there are further terms and conditions which then separate the roles and responsibilities. He also commented, when shown further such language, that this is customer facing language, it could be clearer and this is the whole journey for the customer. Tapi try and give them the information that they would expect as part of the service for the delivery and care package but the terms and conditions that bind the fitting are set out here as well. (6) Mr Johnson was questioned about the reasonable skill and care provision and limitations on liability: (a) Mr Johnson agreed that in the relevant references in the terms and conditions, Tapi was committing to the fitting service being one conducted with reasonable care and skill. (b) He accepted in effect that Tapi was seeking to limit the potential liability that could arise from fitting services when it states: “The customer utilises the assistance of the fitting partner for the movement of furniture at their own risk, and the fitting partner is not liable for any accidental damage….” and “neither we nor any fitting partner undertakes to carry out any redecoration except where damage has been caused by that person’s negligence”
. He added that as part of the vetting, Tapi ensure that the fitters carry their own public liability insurance as well in case of any unfortunate circumstances. He said, in effect, that as well as seeking to limit what the customer gets as a matter of contract Tapi is trying to make the customer aware of things that they do need to factor in. They are trying to keep the customer informed as well over the best way forward to ensure they get a quality job done. He later accepted that in effect Tapi here set the terms for the fitting. He said there are further details on the website in the legal terms and conditions. (c) It was put to Mr Johnson that, in light of these terms, it is not accurate to state that the fitters are free to undertake the fitting job in the manner which they think is most appropriate. He said that Tapi expect reasonable care and attention and that is pretty standard across most industries, really. From a reputation and brand perspective, Tapi would expect the fitters to have a bit of a commonsense approach with the customer. (d) As regards the provision that: “It is the responsibility of the customer to make the fitting partner aware of any known hazards or issues which may affect their ability to complete the installation”, he said this is just to make the fitting service as smooth as possible for the customer. He accepted there is nothing that states Tapi was acting as an agent in any way, or what that would mean but said that is detailed further later on in the terms. 50. Mr Karir and Mr Johnson were asked what is involved in “arranging a pre-cut service to aid in an official and speedy at-home installation”: (1) Mr Karir said in effect that Tapi is responsible for (a) introducing a customer to a fitter and facilitating and co-ordinating the appointment according to what works for a customer. The customer essentially decides when they want to have the product fitted and Tapi tries to match the skill and availability of a fitter, (b) goods such as a carpet may arrive in a big roll; Tapi staff bring the roll from the racking onto the warehouse floor, bundle in the associated ancillaries alongside with the cutting plan that is electronically generated when Tapi measure the customer’s space. The fitter undertakes any cutting required at the warehouse. The Tapi team do not have the skill set to be able to do that, and (c) Tapi also assist in the event that there is a dispute. All retailers want to avoid rolling out a carpet on a road outside a customer’s home to avoid it getting dirty or wet. He agreed that in these circumstances Tapi is not just matching the fitter and customer but is taking steps to help the fitting to be efficient and speedy. He said that Tapi is trying to deliver a good customer experience – that is the part that Tapi plays. (2) Mr Johnson clarified that when the carpet arrives in a big roll, in fact Tapi staff cut it to size (as in to length and width) and where Tapi had ordered a product on behalf of the customer from a third-party supplier, that already comes in pre-cut, (as in the length and the width) to the customer requirement. If the goods need cutting further such as for a staircase or landing, the fitter does that as the fitter is the expert in that area. Tapi therefore supplies the pre-cut service other than where, as described, the fitter needs to make the cut. It is done in order to make the installation/fitting efficient and speedy. Tapi try to provide the fitter in the warehouse, with not only the flooring but also any ancillaries, underlay, gripper rods, door bars all in one place with the fitters worksheet so that the fitter has a full picture of the job and availability. (3) Mr Johnson confirmed that “whipping of carpets” is a service that Tapi provides and the customer pays Tapi for that service although they have now outsourced that service to a third party, because it is a very specialised area.[51]As regards customer satisfaction and disputes over the fitting services:(1) Mr Johnson confirmed that Tapi gives the fitter a “satisfaction note” to be signed by the customer confirming that the customer has inspected the quality of the products and is satisfied with the quality of all work completed including the fitting. He said that Tapi absolutely takes an interest in knowing that the customer is happy with the fitting service after the job because they have a reputation to uphold. They would expect the customer to be happy with the fulfilment of the job. They also follow that up with “happy calls” with the customer to discuss their whole experience with Tapi, of which fitting is part.(2) Mr Karir said that if something goes wrong, the customer has two options. They can either get in touch with the fitter, because at that stage the fitter would have spoken to the customer and/or texted the customer so the fitter would have his contact details; or they would get in touch with the store. He noted that fitters must have public indemnity insurance. Where contacted, Tapi would ask the fitter in the first instance to get in touch with the customer to get the problem solved. Tapi essentially calls up the fitter, asks them to inspect and put it right and if the original fitter for some reason is not available, Tapi pays someone else to go and put it right or possibly to ask them to do it as a favour(3) Mr Johnson said that if there is a dispute, Tapi would act on behalf of the customer and facilitate the original fitter going back to rectify any work and where the original fitter is not available, Tapi sometimes pays as a gesture of goodwill and to protect their brand. They may instigate and request another fitter go out and inspect the job and basically inform Tapi what is needed to put it right. Tapi would not want the whole customer experience to reflect badly on Tapi.(4) Mr Johnson was taken to a message from a customer to Tapi relating to a complaint made by customer. The customer asked Tapi to settle an invoice for an electrician as soon as possible and said:
“We are still awaiting quotes from the remainder of the damage but you also need to advise on how you plan to resolve the fact that we do not have a fitted carpet which is the basic service you were supposed to provide and fit.”
It was put to him that clearly, the customer was given the understanding that Tapi fitted the carpet. He said as he reads it Tapi made it clear to the customer that it was acting as agent so that if there were any issues that could not be resolved directly with the customer and the fitter, Tapi would step in and act on their behalf to direct the fitter to resolve. He did not accept that there is nothing clear about that customer journey that indicates that Tapi was only an agent. We note that earlier in the email chain Tapi informed the customer that the fitter who originally did the work would attend as it was for him to rectify the issue.

Mr Karir’s evidence on HMRC’s investigations

[52]Mr Karir explained that HMRC had investigated Tapi’s relationship with the fitters in an employment tax context as follows:(1) On 17 June 2024, following the submission of this appeal to the tribunal, HMRC contacted Tapi regarding a review of the employment status of independent fitters. Following a thorough investigation, HMRC concluded in a letter of 2 June 2025 that the fitters were self-employed contractors and not employed by Tapi. HMRC’s conclusion was confirmed by letter on 2 June 2025. They stated that: “Independent contractors are not supervised during their work and receive no formal instruction from [Tapi]…They are expected to complete jobs to a professional standard, but the method and approach are left to their discretion… “Work is offered informally through local stores based on availability, and there is no obligation to accept. Independent contractors may decline jobs, take time off without approval, and are not subject to formal scheduling or reporting…” “Independent Contractors are contacted based on their availability and preferences, and there is no centralised or standardised allocation process.” “Independent contractors are not assigned to specific locations and often work across multiple stores or areas…” “Independent contractors do not have set working hours and are not required to be available for a specific number of jobs.. Scheduling is informal and based on availability, with no obligation to commit to specific hours or days…” “Independent contractors arrange job times directly with customers and take breaks, holidays, or time off at their own discretion, without needing approval. If unavailable, they inform the store or customer, and the job is reassigned if needed. Independent contractors manage their own diaries, and [Tapi] does not access or control their schedule.. “Tapi […] exercises a low level of control over independent contractors. They work independently, manage their own time and workload, and are not subject to supervision or formal procedures.” “Independent contractors are not contractually bound to carry out the work themselves. They have the freedom to bring in others to assist or to complete the work on their behalf, and they are responsible for arranging and paying any substitute directly. Tapi […] does not control or approve these arrangements and has acknowledged that substitution does occur”.. “In cases where independent contractors are unavailable due to illness or other reasons, the job may be rearranged directly with the customer or reassigned to another fitter through the store”.. “Independent contractors supply all the tools required to carry out their work, including hand tools, power tools, and protective equipment. These are purchased and maintained at their own expense. If any equipment is damaged or broken, they are responsible for replacing it. Tapi does not provide any tools, materials, or uniforms…”. “Independent contractors are advised not to wear branded clothing to avoid being seen as representatives of the company”.. “Tapi […] does not provide vans or cover travel or accommodation costs”.. “Independent contractors are also required to hold their own public liability insurance and must provide evidence of this to Tapi before being introduced to customers.”(2) The initial conclusion letter from HMRC made a number of references to the fitter being a “sub-contractor” of Tapi. Tapi explained by email that this was a misdescription of the arrangement and that Tapi and the fitters are entirely independent parties and that the contract for fitting services is between the customer and the fitter. Following receipt of that email HMRC amended the letter to remove any references to “sub-contractor”.[53]Mr Karir said this as regards the investigation into Tapi’s VAT position which led to the issue of the assessments:(1) Tapi was first approached by HMRC in February 2023 about the VAT treatment of flooring. On 13 February 2023 HMRC undertook a site visit to Tapi’s Team Valley store in Gateshead. He was not the primary contact person in relation to the discussion with HMRC but he was aware that discussions/correspondence took place. He considers it has always been clear that the fitters are self-employed and accept fitting jobs as the principal (for VAT purposes). Tapi’s role has always been limited to making those initial introductions and scheduling the appointments. Tapi have no control over the fitters and both Tapi’s and the fitters’ roles are clearly set out in the terms and conditions which are shared with the customers.(2) The assessments raised by HMRC for the relevant periods are based on amounts provided by Tapi to HMRC. However, as explained to HMRC Tapi does not keep records of the final fitting fees paid by the customer to the fitter. This is something which is solely between the fitter and the customer. For the purposes of allowing HMRC to issue assessments, the amounts have been estimated based on the following: (a) Total square metres (m2) of flooring for which the fitting arrangement service was used. (b) Industry standard fitting rate per m2 (i.e. an estimation of what the fitters would have charged). (c) Based on the two factors, Tapi calculated a reasonable approximation of the total amount paid by customers to fitters across the relevant transactions.[54]Mrs Crosby is employed as a VAT Tax Specialist at HMRC in Newcastle upon Tyne. She has been employed by HMRC since 18 August 2014 and has been a VAT Tax Specialist for three years. In November 2022, she was allocated to Tapi to carry out a VAT compliance check.(1) On 6 February 2023, she contacted the appellant by telephone and spoke with Mr Paul Jacobs, the Company Secretary. Throughout her compliance check, she only corresponded with Mr Jacobs.(2) She set out in some detail the process she followed in her investigation and the reasons for her conclusion. As part of this she noted that Tapi advised her that when the customer pays Tapi for fitting, they pay the fitter less to make a profit.(3) On conclusion of her enquiries, she explained to Tapi that she was looking to quantify the fitting fees where VAT had not been accounted for by Tapi. Tapi explained this data is not kept but that they would speak with their finance department about how it could be quantified.(4) She confirmed that the analysis of her colleagues as regards the employment tax position on the conclusion of their investigation (as set out by Mr Karir) did not cause her to reconsider her VAT analysis. She said that the matter at issue in her investigation was not whether the fitters were self-employed or employed by Tapi; it was never in dispute and she always accepted that the fitters were self-employed. She was looking at whether Tapi were acting as agent or principal. She cannot say any more on the employment tax investigation; she was not privy to it. She confirmed that if the correct conclusion is that the fitters are independent contractors and not “sub-contractors”, that would not cause her to reconsider her VAT analysis.(5) She was asked why, as in Tapi’s view is the result of HMRC’s analysis, Tapi would enter into a world in which they would receive £83 after VAT, but have an obligation to pay £100 to the fitter and why that is commercially realistic. She said Tapi sell carpets. They want to sell carpets to their customers and provide a fitting service. They outsource the fitting to the fitter. The fitter is providing the fitting to Tapi. The fitters are collecting the money from the customer, and by doing so, “they are absorbing that administrative burden from every time they sell a carpet and they have fitting included with the sale, they then don’t need to make an onward payment to the fitters every week, every month, however often that would be… I’m not a commercial person. I don’t know how they would choose to operate in a real world scenario if they did it a different way, that wouldn’t be for me to say.” She does not think it is her place to say whether that would be commercially realistic or not. Part C – Law, submissions and conclusions Law

Part C – Law, submissions and conclusions

[55]It was common ground that, whilst there was a change in law during the relevant period due to Brexit, in effect, at all relevant times, the applicable rules in VATA must be interpreted in accordance or given a conforming construction with the corresponding rules in Council Directive 2006/112/EC (“the PVD”) and that there is no inconsistency in the two sets of rules.[56]The following provisions in VATA are relevant to determining whether there has been a supply: (1) Section 4(1) provides that VAT will be charged on:
“any supply of goods or services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him”. (2) Section 5(2) provides that: (a) ““supply” in this Act includes all forms of supply, but not anything done otherwise than for a consideration”; (b) “anything which is not a supply of goods but is done for a consideration (including, if so done, the granting, assignment or surrender of any right) is a supply of services.” (3) Section 19 (2) VATA provides that: “… If the supply is for a consideration in money its value shall be taken to be such amount as, with the addition of the VAT chargeable, is equal to the consideration.”
[57]Sections 4 and 5 VATA reflect the following Articles in the PVD:(1) Article 2(1)(c) of the PVD (formerly Article 2 of the Sixth Directive) provides that the “…the supply of services for consideration within the territory of a Member State by a taxable person acting as such” will be subject to VAT.(2) Articles 14 and 24(1) have the effect that a transaction that is not a supply of goods is a supply of services.[58]Paragraph 1-001(1) of Article 1 of Bowstead & Reynolds on Agency (23rd edition) describes the concept of “agency” in the following terms:
“Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with third parties, and the other of whom similarly manifests assent so to act or so acts pursuant to the manifestation. The one on whose behalf the act or acts are to be done is called the principal. The one who is to act is called the agent. Any person other than the principal and the agent may be referred to as a third party.”
[59]In Maritime Stores Ltd v HP Marshall & Co Ltd [1963] 1 Lloyd’s Rep 602 (“Maritime Stores”), at [608], the following summary of the law set out in an earlier edition of Bowstead & Reynolds on Agency was approved:
“The question whether an agent who has made a contract on behalf of his principal is to be deemed to have contracted personally, and, if so the extent of his liability, depends on the intention of the parties, to be deduced from the nature and terms of the particular contract and the surrounding circumstances, including any binding custom.”

Caselaw

[60]The partiers referred to the Court of Appeal’s decision, in Adecco (UK) Ltd and Others v HMRC [2019] 1 All ER 615 (“Adecco”) which summarised the following applicable principles as regards, for VAT purposes, the nature of a supply made for consideration:
“38. The following propositions can, I think, be derived from the case law: i)The concept of a "supply" is "an autonomous concept of the EU-wide VAT system" (the Airtours case [Revenue and Customs Comrs v Airtours Holidays Transport Ltd [2016] UKSC 21, [2016] STC 1509], at paragraph 20, per Lord Neuberger); ii) A supply of goods or services "for consideration", within the meaning of article 2(1) of the Principal VAT Directive , "presupposes the existence of a direct link between the goods or services provided and the consideration received" … iii) A supply of services "is effected 'for consideration', within the meaning of art 2(1) of the [Principal VAT Directive], and hence is taxable, only if there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance, the remuneration received by the provider of the service constituting the value actually given in return for the service supplied to the recipient(Revenue and Customs Comrs v Newey (t/a Ocean Finance) (Case C-653/11) EU:C:2013:409, [2013] STC 2432, at para 40 of the CJEU’s judgment; see also Tolsma v Inspecteur der Omzetbelasting Leeuwarden (Case C-16/93) EU:C:1994:80, [1994] STC 509, [1994] ECR I-743, at para 14 of the judgment);”
[61]The court continued to explain that all or part of the consideration for a supply can come from someone other than the recipient of the supply and referred to the extensive caselaw on that topic: iv) … Article 73 of the Principal VAT Directive refers to consideration being received “from the customer or a third party” and, consistently with that, “it is not a requirement … that, for a supply of goods or services to be effected 'for consideration' … the consideration for that supply must be obtained directly from the person to whom those goods or services are supplied” (Revenue and Customs Comrs v Loyalty Management UK Ltd, Baxi Group Ltd v Revenue and Customs Comrs (Joined cases C-53/09 and C-55/09) EU:C:2010:590, [2010] STC 2651, [2010] ECR I-9187, at para 56 of the judgment). In Revenue and Customs Commissioners v Aimia Coalition Loyalty UK Ltd [2013] UKSC 15, [2013] 2 All ER 719, [2013] STC 784, Lord Reed explained (at paragraph 67):
“consideration paid in respect of the provision of a supply of goods or services to a third party may sometimes constitute third party consideration for that supply, either in whole or in part…. Economic reality being what it is, commercial businesses do not usually pay suppliers unless they themselves are the recipient of the supply for which they are paying (even if it may involve the provision of goods or services to a third party), but that possibility cannot be excluded a priori. A business may, for example, meet the cost of a supply of which it cannot realistically be regarded as the recipient in order to discharge an obligation owed to the recipient or to a third party. In such a situation, the correct analysis is likely to be that the payment constitutes third party consideration for the supply.”
In a similar vein Lord Neuberger said in the Airtours case:
“[57] When the Court of Justice speaks of “reciprocal performance” it is looking at the matter from perspective of the supplier of the services and it requires that under the legal arrangement the supplier receives remuneration for the service which it has performed. It is not necessary that the recipient of the service is legally responsible to the supplier for payment of the remuneration; it suffices that the arrangement is for a third party to provide the consideration. Were it otherwise, taxpayers could structure their transactions so as to escape liability to pay VAT so long as they could meet the economic reality test. [58] When this court has discussed third party consideration in what is now art 73 of the Principal VAT Directive it has similarly not restricted it to consideration provided alongside, or in performance of, a legal obligation of the recipient—see WHA Ltd, at [56] per Lord Reed, in which the garage provided a service to the insured car driver but the insurer alone was responsible for remunerating the garage, and Loyalty Management UK Ltd, at [67] per Lord Reed”;”
[62]The court explained that consideration “of economic realities is a fundamental criterion for the application of the common system of VAT”, including “as regards the identification of the person to whom goods are supplied” and therefore that has to be considered as well as the contractual position:
“v) … When deciding whether the person who pays for a supply is himself the recipient of it, therefore, it can be important to have regard to the economic realities as well as the contractual relationships. In Newey, the CJEU explained as follows: “43. Given that the contractual position normally reflects the economic and commercial reality of the transactions and in order to satisfy the requirements of legal certainty, the relevant contractual terms constitute a factor to be taken into consideration when the supplier and the recipient in a 'supply of services' transaction … have to be identified. “43. Given that the contractual position normally reflects the economic and commercial reality of the transactions and in order to satisfy the requirements of legal certainty, the relevant contractual terms constitute a factor to be taken into consideration when the supplier and the recipient in a 'supply of services' transaction … have to be identified. 44. It may, however, become apparent that, sometimes, certain contractual terms do not wholly reflect the economic and commercial reality of the transactions. 45. That is the case in particular if it becomes apparent that those contractual terms constitute a purely artificial arrangement which does not correspond with the economic and commercial reality of the transactions.”” (Emphasis added.)
[63]The court continued, at [39], to note that the significance of, respectively, contractual relationships and economic realities has been the subject of comment in several recent cases in the Supreme Court and referred to other cases which the parties also referred to in this case: (1) The court set out that in WHA Ltd vRevenue and Customs Commissioners [2013] UKSC 24, [2013] STC 943 (“WHA”) Lord Reed commented (at [27]):
“The contractual position is not conclusive of the taxable supplies being made as between the various participants in these arrangements, but it is the most useful starting point.” (2) The court referred to Secret Hotels2 Ltd v Revenue and Customs Commissioners [2014] UKSC 16, [2014] STC 937 (“Secret Hotels”). In that case, the Supreme Court considered whether a tour operator, Med, was acting solely as an “intermediary” in offering hotelier’s rooms for booking by customers on its website for the purposes of Article 306 of the Sixth VAT Directive (relating to “the Tour Operator’s Margin Scheme”), which the court considered required the same approach to determining whether the tour operator offered rooms as agent or principal. The court referred to Lord Neuberger’s following comments: “[34] In the present proceedings, it has never been suggested that the written agreements between Med and hoteliers, namely the Accommodation Agreements, were a sham or liable to rectification. Nor has it been suggested that the terms contained on the website …, which governed the relationship between Med and the customers …, were a sham or liable to rectification. In these circumstances, it appears to me that (i) the right starting point is to characterise the nature of the relationship between Med, the customer, and the hotel, in the light of the Accommodation Agreement and the website terms ('the contractual documentation'), (ii) one must next consider whether that characterisation can be said to represent the economic reality of the relationship in the light of any relevant facts, and (iii) if so, the final issue is the result of this characterisation so far as art 306 is concerned. [35] … In order to decide whether the FTT was entitled to reach the conclusion that it did, one must identify the nature of the relationship between Med, the hotelier, and the customer, and, in order to do that, one must first consider the effect of the contractual documentation, and then see whether any conclusion is vitiated by the facts relied on by either party.” (Emphasis added.)
(3) The court also referred again to Revenue and Customs Comrs v Airtours Holidays Transport Ltd [2016] UKSC 21, [2016] STC 1509, where Lord Neuberger said this (at [50]):
"From these domestic and Court of Justice judgments, it appears clear that, where the person who pays the supplier is not entitled under the contractual documentation to receive any services from the supplier, then, unless the documentation does not reflect the economic reality, the payer has no right to reclaim by way of input tax the VAT in respect of the payment to the supplier." (Emphasis added.)
[64]HMRC submitted that, whilst the facts in WHA are very different to those in this case, it is notable that the court had no difficulty in looking at the “true deal” and finding that the contractual arrangements did not reflect the economic and commercial position; one must ascertain the real supply and the real consideration for any supply (see [37], [38], [56] and [57] of WHA).[65]HMRC also considered that the passages in Revenue and Customs Comrs v Newey (t/a Ocean Finance) (Case C-653/11) [2013] STC 2432 referred to in Adecco underline the point that the contractual arrangements are a factor, but they are not “the trump card”. In their view,(1) Tapi’s approach, is that the labels used in the contract are definitive and the other external important evidence can be disregarded, and(2) clearly the authorities establish that how the parties label the relationship in the contract is not the last word. The contracts are of course relevant evidence but, if and to the extent any part of the contract is not actually, in substance, agency or does not actually, in substance, show that the fitters are making their supply to the customers, then those parts are not determinative of the nature of the supply, and the tribunal must set those aside or otherwise characterise the supply in accordance with its findings as to economic and commercial reality. In HMRC’s view, there is a large volume of evidence in this case which shows a very consistent picture in which the customer is strongly given to believe that Tapi supplied the fitting services.[66]Tapi disputes that its approach is as represented by HMRC for the reasons set out below. On WHA, Tapi commented that(1) the question ultimately in that case was whether an insurer was entitled to recover input tax on the sums paid for the repair work undertaken by a garage on a motorist’s car when the insurer paid the sum under an insurance policy held with it by the motorist,(2) it was held that the insurer was not so entitled as its obligation under the policy was to pay for work and not to do the work or procure that the work was done; the garage made the supply of repair works to the motorist and the motorist simply had a claim in money on the insurer, and(3) the point of relevance to this case is that in making this decision the Supreme Court focussed on who did the work and who obtained the benefit of the work and concluded that there was plainly a supply by the garage to the motorist, albeit it was paid for by the insurer. Here, there is an analogy that the work is done by the fitter in fitting the customer’s carpet in the customers home for the customer’s benefit and paid for by a direct payment by the customer to the fitter.[67]Tapi submitted that there is an obvious parallel between this case and that in Secret Hotels where Med was found, in effect, to be just an agent in facilitating the provision of hotel services by the hotelier to the customer:(1) Lord Neuberger rejected HMRC’s contention (at [39]) that: The terms of the accommodation agreement included provisions which indicated that Med’s interest were wider than that of a mere agent - such as covenants by the hotelier to honour customers’ bookings, to insure the hotel against a number of risks, to keep the hotel clean, and to permit Med’s representative to inspect the hotel.(2) Lord Neuberger said he was “unimpressed” with this point (and others made by HMRC) (at [40]). In his view this merely reflected that Med was in a powerful negotiating position due to its substantial goodwill in the holiday market:
“They all stem from, and reflect, the fact that Med had a substantial business based on the website (as is evidenced by Med’s turnover, the number of hotels for which it had an exclusive agency, and the fact that it was a member of a large group of companies including lastminute.com). This in turn means that it had built up a substantial goodwill in the holiday-making market which it wished to protect, and that it was in a much more powerful negotiating position than the hoteliers with which it was contracting.” (3) He said (at [41]) that the fact that the hotelier agreed to do things which would be of benefit to people staying in the hotel he thought was “easily explained by the point that Med was anxious to maintain its goodwill among holiday-makers and travel agents, and was in a strong enough bargaining position to impose such terms on the hotelier.” (4) At [42], he noted that the contract between the tour operator and the consumer contained the following provision: “the [tour operator] provides information concerning the price and availability of hotels [and] …any reservations you make on this site will be directly with the company whose hotel services you are booking.” (5) At [56] to [57], he concluded as follows (Tapi also referred to [54] but that simply sets out the issue): “56…One starts with the written contract between Med and the customer, as it is the customer to whom the ultimate supply is made. However, one must also consider the written contract between Med and the hotelier, as there would be a strong case for saying that, even if Med was the hotelier's agent as between it and the customer, Med should none the less be treated as the supplier as principal (in English law) or 'in its own name' (in EU law) if, as between the hotelier and Med, the hotel room was supplied to Med. “57. For the reasons set out in paras [36]–[44] above, I consider that the contractual documentation supports the notion that Med was an intermediary, and, in the light of the discussion in paras [45]–[50] above, it seems to me that 'economic reality' does not assist a contrary view. Further, one aspect of economic reality is that it is the hotelier, not Med, who owns the accommodation and it is the customer, not Med, to whom it is ultimately supplied: that does not, of course, prevent the hotelier supplying the accommodation to Med for supply on to the customer, but it makes it hard to argue that Med's analysis that it is no more than an agent is contrary to economic reality. Further, one must be careful before stigmatising the contractual documentation as being 'artificial', bearing in mind that EU law, like English law, treats parties as free to arrange or structure their relationship.” (Emphasis added.)
[68]HMRC submitted that(1) it is important to note that (a) the argument was that Med was a seller’s agent not a buyer’s agent, and (b) Med did not simply select a hotel and match it with a customer. The customer had the option to select a hotel from a range, and(2) the approach in [34] and [35] of Secret Hotels again shows the importance of not simply accepting labels used in the contracts as, in HMRC’s view, is the effect of Tapi’s approach.[69]HMRC considered that the decision of the Court of Appeal in Adecco is of particular relevance as it was found that Adecco was supplying temporary workers’ services to clients, not merely making supplies of introductory and ancillary services, having regard to a number of factors many of which HMRC consider are relevant here:(1) The temps did not provide their services under contracts with the clients: no such contracts existed. The contractual position was that the temps’ services were provided to clients in pursuance of the contracts between, on the one hand, Adecco and its clients and, on the other, Adecco and the temps (see [49(i)]).(2) Although the contract between Adecco and a temp referred to the temp undertaking an assignment “for a Client” and providing services “to the Client”, it also spoke of the client requiring the temp’s services “through Adecco” and of the temp being supplied “through Adecco” (see [49(ii)]).(3) While temps were to be subject to the control of clients, that was something that the temps agreed with Adecco, not the clients (see [49(iii)]).(4) Adecco paid temps on its own behalf, not as agent for the clients (see [49(iv)]).(5) This led to the broader point that Adecco by no means dropped out of the picture once it had introduced a temp to a client. It was responsible for paying the temp (and for handling national insurance contributions and the like) and had to do so regardless of whether it received payment from the client and even if the client had rejected the temp in the first two hours and so escaped any liability. While, moreover, Adecco did not often need to exercise them, it enjoyed rights of termination and suspension; a client was to contact it if a temp proved unsatisfactory; and it was to Adecco (not the client) that a temp undertook not to take unauthorised leave (see [49(v)]).(6) Adecco charged a client a single sum for each hour a temp worked. It did not split its fees into remuneration for the temp and commission for itself (see [49(vii)]).(7) The fact that Adecco had no control over a temp in advance of his taking up his assignment with the client can matter (see [49(ix)]):
“Suppose, by way of comparison, that a building contractor entered into a contract with a self-employed plumber for the latter to undertake work that would enable the contractor to fulfil his own obligations to an employer. It could hardly be suggested that the fact that the plumber had had no prior obligation to take on the job would preclude him from supplying services to the contractor and the contractor in turn supplying services to the employer. Such back-to-back arrangements are, of course, commonplace;”
[70]Tapi submitted that(1) it plainly weighed significantly in the mind of the Court of Appeal that Adecco paid the temps and took economic risk on whether it would be paid by the client, and(2) conversely, in the present case, the customer pays the fitter.[71]HMRC also placed reliance on the decision of the tribunal in A1 Lofts Ltd and Another v HMRC [2010] UKFTT 581 (TCC) (“A1 Lofts”) particularly as regards the importance of pre-setting of the price. In this case it was held that the taxpayer was not merely an agent in arranging for customers to receive loft conversion services from contractors:
“9. We find the following matters point to the Agreement being inconsistent with agency. The price, which appears on the first page of the Agreement, is determined by Mr Mills on behalf of A1 Lofts without reference to any other party. There is no evidence that at any stage Mr Mills attempted to obtain quotes from different parties and thus provide the client with the best price. This approach of setting the price for the whole of the works without having ascertained whether there were other contractors prepared to do the work for that price is not consistent with agency. In an agency relationship an agent would normally agree the level of his commission and then go out and find the best price for the works from builders and other tradesmen. A1 Lofts agreed the price for the whole works and undertook that the work could be done at that price regardless of the fact that no tradesman had yet agreed to do the job at that or at any price. A1 Lofts was able to do this because it has a panel of tradesmen whose availability it knows and its willingness to do the job at a certain price it can rely on. However, that set of circumstances is not consistent with agency or the fiduciary duties owed by an agent to his principal in an agency relationship such as is alleged in this case. 10. It is the case that an agent holds the power to affect the legal relations of his principal and in doing so he must act in the best interests of his principal at all times. The Agreement purports to commit the client to contracts with third parties to perform building works. If that is the effect of the contract, then it allows A1 Lofts to use the client's money entirely at its own discretion; the client has no knowledge as to who has paid what for doing the work, whereas, if A1 Lofts were acting as an agent, it would have a fiduciary duty to use that money in the client's best interests and to his best advantage. According to the Agreement, A1 Lofts selects the contractor and offers him the work at a set price without any scope for negotiation. By simply offering and paying a sum of money to the tradesman, which must be within a range of sums known to be acceptable to the tradesman, A1 Lofts is not necessarily acting in the client's best interests as it is not looking for the best price for the work. There is therefore a potential conflict of interest between A1 Lofts and the client in that it is in A1 Lofts' interest that the client will agree the price, even though it may not be the best price available on the market. If A1 Lofts were truly an agent, it would not incur such a conflict with its principal. We accept Mr Smith's submission that this is not a matter of evidence, but a question of whether the A1 Lofts' business structure is compatible with it acting as an agent for the client. Mr Smith submitted that the fact that it is incompatible with the fiduciary duties owed in such a relationship shows that the contract should not be construed as one of agency.” (Emphasis added)
[72]Tapi submitted that the circumstances in A1 Lofts are different from those this case as(1) in A1 Lofts the taxpayer set the price for the loft conversion without reference to any other party whereas Tapi identified and used the market rates in providing estimates for the fitting services, those rates reflected what fitters would accept for providing their services, and so Tapi ensured it obtained the best rate for customers, and(2) the decision in A1 Lofts depended on a finding that the contracts in that case were inconsistent with agency; in fact, they were internally inconsistent (see [13], [14], [15] and [16]) and, in particular, that the pre-contractual material gave the client the impression that “whilst A1 Lofts will be appointing subcontractors to do the work, A1 Lofts themselves will be contracting to build a loft conversion” and it was unambiguously stated that: “A1 Lofts will provide you with a complete new living area without the hassle and expense of moving” (see [21] and [25]).[73]Finally, HMRC relied on the tribunal’s decision in JM Ledger and CE Ledger (T/A Lewis Carpets) (Decision No. 18756) (unreported) [2004] Lexis Citation 857 (“Lewis Carpets”), where the tribunal rejected a finding of agency despite contractual terms to the contrary in a carpet fitting case referring in particular to [41], [42] and [48] onwards including the following passages:
“49. We consider that it is a matter of great importance that the customer has no ability to negotiate any of the principal terms of the contract with the fitter, in particular if the customer wishes to change the day of the appointment to have the carpet fitted, he has to contact the Appellants and is asked to do so at least 48 hours beforehand. If he did indeed have a separate contract with the fitter, then it would be expected that such negotiations would be made directly with the fitter. Whilst this of itself might be indicative of the Appellant acting as agent for the fitter and for the customer as well, the fact that the customer has an invoice which includes a price for the fitting, but which price has been settled by the Appellant, rather than being a matter for negotiation or agreement between the customer and the fitter, points to there being a sub-contract with the fitter. In the circumstances of this case it would be possible for the Appellants to create a situation of agency, but in our judgment they have not done so. The customer has no control over who will act as fitter, he has no control over the amount paid to the fitter and if things go wrong he will on some occasions look to the Appellants to correct matters. If a fitter does not arrive, it is to the Appellants that the customer turns. If he wishes to change the date of the fitting, it is the Appellant who deals with this. Whilst it was stated by the Appellants on their documents that they had no legal responsibility if the fitting went wrong, this is not necessarily a matter on which they can rely. It was Mr Ledger's evidence that if he were asked, he would say to a customer that the fitters were “Very good”, and this therefore becomes an implied term of the contract as to the standard of fitting to be expected. The fact that the Appellant pays the fitter is not sufficient by itself to create a separate contract. There is nothing to indicate to the customer that there will be a separate contract because he pays the fitter directly. The customer would perceive that there is one contract with the Appellants.” (Emphasis added)
[74]Tapi noted that in Lewis Carpets:(1) The fitters were paid a set rate with no possibility for them to negotiate different rates. The rates paid were said to be standard through the industry (see [10]) (although some big companies paid more when they were supplying larger carpets), and Mr Ledger accepted that the customer was unable to negotiate the price of the fitting, as well as that fitters were unable to negotiate the price they were paid (see [13]). In this case there is the possibility that the job will not be as described and a different fee will be negotiated.(2) Mr Ledger accepted it was not really correct to say that the customers were getting a free fitting – that was said because it gave a competitive edge and the customer could see the total cost of the carpet including fitting, and would not have any add-ons to take into account. That lead to the conclusion, at [48], that there was a single supply of a fitted carpet for a global price (see [25], [32] and [48]):
“A customer on seeing the tag advertising a free fitting service would conclude there was but one contract, and that was with the Appellants for the supply and fitting of the carpet.”
In this case there is no argument about whether there is a supply of a fitted carpet. The only debate is to whom the fitting service is supplied. It is not contended that that fitting service is part of a single supply of a fitted carpet; it is a separate supply. (3) Moreover, in that case the conditions of sale included that:
“We base our price on a Cash and Carry basis therefore if you require a fitting service, we can arrange a Sub-Contract fitter to carry out the work. He is completely separate from us, therefore, any queries referencing fitting errors should be taken up with the fitter as we will not accept any liabilities.”
The tribunal’s ultimate conclusion, that this was a “sub-contract” relationship and not an agency relationship, is not a surprise, given the nature of the information given to the customer on the back of the invoice. This was held to be a material factor as “on the invoice which is given to the customer it states that the fitter is a sub-contractor, the customer would therefore believe that this was the case” (see [53] and [55]).[75]Tapi submitted that both of the above decisions pre-date the binding authority on the correct approach to the interpretation of contracts and, in any case, the recent decision of the tribunal in United Carpets (Franchisor) Ltd v HMRC [2025] UKFTT 895, TC09596 (“United Carpets”) is of much more relevance. In that case, the tribunal held that “none of the factors identified and relied on by HMRC undermine the position set out in the contractual arrangements”. HMRC have not appealed this decision. Notably, these factors included the following (see [198] to [211]):(1) The fitting fee was agreed between United Carpets and the customer, without recourse to the fitter at the time of the order.(2) The customer did not know the identity of the fitter at the point of sale and the customer had no input in choosing a fitter. The tribunal held that this was of “no probative value to HMRC’s case… because the service provided by the fitter is not a personal one in the sense that the identity of the fitter is material from the customer’s perspective” [202];(3) The tribunal concluded that the fitting fee entered on the invoice at the time of sale was an estimate. That estimate was based on the 'going rate', discussed between United Carpets and the fitters.(4) The fitting charge might be different from the estimated cost (depending on the actual job) as agreed between the fitter and the customer. The Tribunal found that “such an arrangement is entirely consistent with there being a separate supply of fitting by the fitter to the customer.” [201][76]The tribunal held:
“205… the Appellant (the putative contractor in HMRC's analysis) is not entitled to receive (and does not in fact receive) any economic benefit from the price paid for the fitting services. The payment is made by the customer to the fitter, directly, and the fitter retains the entire amount. In many circumstances, the Appellant will not know what the final fitting charge is if surcharges have been applied, or if the job is not as described by the customer.” “208… We are satisfied that the economic and commercial reality in this appeal is that the fitters are independent and it is they who undertake fitting work for the customers. They do not work for the Appellant and the Appellant is not obligated to remunerate them for any fitting services. The absence of adopted written terms between the Appellant and the fitters is not fatal to the overall picture but serves to reinforce the independence of the fitters.” “209. We accept, and agree, that the fitting terms are uncomplicated. Essentially, one job is the same as another. The customers pay the fitters directly upon completion of the job. The fitter has no obligation to take on work... The core obligation to provide the fitting service lay firmly with the fitters and the obligation to pay for that service lay with the customer.” “210. In respect of the small minority of circumstances where the Appellant assists a customer with problems in the fitting service provided, this is not to be translated into a finding that the Appellant is the one making the supply. This is because the assistance given by the Appellant is explicable by reference to its need to maintain its brand and reputation with customers. The fact that the stakes may be high for the Appellant does not translate into a finding that there is a supply of fitting being made by the Appellant, and does not result in a legal obligation on the Appellant (in relation to fitting).”
[77]Tapi submitted that the conclusion reached in the United Carpets decision reflects how the industry operates, and the same conclusion ought to be reached on the highly similar facts in this case. For the reasons set out above, the decisions relied on by HMRC in an agency context have materially different facts and it is notable that A1Lofts and Lewis Carpets were decided before the decisions setting out the correct approach as a matter of principle.[78]HMRC said that there are significant factual differences between this case and United Carpets. In their view, major distinguishing features include(1) United Carpets made no claim to be a customers’ agent. It was argued that United Carpets acted as the fitters’ agent but there was no finding that it acted as such (see [211]). Hence, the focus of evidence and cross-examination, and the decision, was on notably different business relationships,(2) there was a written contract between the fitters and customers and between United Carpets and the fitters,(3) there were also no emails of a similar nature to those here in which Tapi repeatedly holds itself out to customers as providing the fitting,(4) there was no obligation to buy a guarantee of the fitting from United Carpets(5) there was no fitting arrangement fee, and(6) there were no terms set out by United Carpets setting a standard of service which the fitters were to provide and no limitation of liability of the type there is in this case. They concluded that overall, it is quite clearly focused on different issues and did not include some of the key evidence that they consider there is in this case. In HMRC’s view, if anything, the case shows a variety of differing terms, agreements and relationships in the flooring industry. Consequently, United Carpets is a different case, focussed on different issues, and lacking the range of the evidence in this case showing an economic and commercial reality differing from the contractual position.[79]HMRC submitted that whilst not put in the same terms as in the later decisions in the higher courts, in A1 Lofts and Lewis Carpets there was an analysis of economic and commercial reality and, if anything it was less easy for courts and tribunals to depart from the contractual terms – but they did in those cases.

Detailed submissions

[80]In summary:(1) Tapi submitted that, under the contractual arrangements (a) Tapi acted as the customer’s disclosed agent in respect of the fitting arrangement service, whereby, for a fee from the customer, it arranged for a fitter to carry out the fitting service, (b) the fitting service itself was provided by the fitter directly to the customer under a contract concluded between them on the day the fitting took place, and (c) in VAT terms, there was a supply of the fitting service by the fitter, as principal, to the customer; there was no supply of fitting services by the fitter to Tapi and by Tapi to the customer. Tapi was not a party to the transaction between the fitter and the customer and contractually was under no obligation to provide the fitting service to the customer. In Tapi’s view this is entirely consistent with the economic and commercial reality of the arrangements.(2) HMRC submitted that (i) in substance the contractual terms do not demonstrate there was an agency relationship of the kind which Tapi asserts there was, and (ii) in any event, those terms are overridden by economic and commercial reality which, in critical ways, does not support Tapi’s case: (a) As a matter of economic and commercial reality, Tapi was the supplier of the fitting services. It discharged its obligation to customers to fit the relevant flooring, by buying-in the services of third-party fitters under an implied sub-contract with them - although the analysis is the same for VAT purposes whether or not the tribunal finds there is such an implied contract. (b) As a matter of administrative convenience, Tapi arranged for customers to pay the “wholesale” cost of fitting directly to the fitters, thereby ensuring that the fitters received consideration for the supply of their fitting services to Tapi. Hence, Tapi received in part non-monetary consideration for its supply of fitting services to the customer; the obligation otherwise on Tapi to pay the fitters for their supplies of fitting services to Tapi was thereby discharged. The fitters, in effect, provided consideration to Tapi by agreeing that, administratively, the customer would pay the fitter and the fitter would not look to Tapi for payment of its fee. That resulted in an economic benefit in real terms for Tapi; it was relieved of the administrative burden of having to receive the money from the customer and pay it out again to the right fitter in the right amount by the right date. It is also greatly commercially beneficial to Tapi because it shifted the risk of the customer not paying for the fitting service to the fitter. (c) The fee paid to Tapi for the fitting arrangement service is, as a matter of economic and commercial reality, the “retail” margin made by Tapi on its supply of fitting to the customer, and so part of the consideration received by it for that supply. The services of arranging the fitting were clearly part and parcel of the supply of fitting services made by Tapi. (d) It does not matter whether the tribunal finds there is one supply or multiple supplies by Tapi; on either analysis, Tapi made supplies of fitting services. It is immaterial whether such a supply to a customer comprised part of Tapi’s supply to that customer of the flooring (such that it was supplying a fitted flooring) or Tapi made an ancillary supply of fitting service.[81]Tapi made the following main submissions in support of its stance:(1) The contractual position is clear: (i) the terms of the contract between Tapi and customers are clearly set out, (ii) there was no contract between the fitters and Tapi, and (iii) the terms and conditions also state that a separate contract in respect of the fitting service was created between the fitters and the customers who availed of themselves of the fitting arrangement service. As can be seen from the terms and conditions: (a) Throughout the fitting arrangement process, both the fitter and the customer were aware that the price quoted by Tapi for the fitting service was non-binding. (b) Should the fitter decide at the time of fitting that the work is more complex than expected, or specific additional work or preparation is required, the fitter could negotiate directly with the customer and agree a revised charge for the fitting service. Tapi was not involved in those negotiations. (c) Either the customer or the fitter could decide not to proceed with the fitting. (d) Once the fitting was completed, the customer paid the fitter directly and Tapi did not receive any of the fitting charge, nor did they verify whether it had been paid, in what amount or by what means. (e) If there was an issue with the fitting, the customer could either contact the fitter directly or ask Tapi to assist; this service was included in the fitting arrangement service. In these circumstances, Tapi may have acted as mediator between the parties.(2) The contractual position is entirely consistent with the commercial and economic reality: (a) Only the fitter has the ability to supply the fitting service (see, in this respect, Lord Neuberger’s comments at [57] of Secret Hotels), the fitter provided the service in the customer’s chosen location to the customer for a fee paid by the customer to the fitter. There is nothing to indicate that Tapi acquired the fitting service from the fitter to make an onward supply to the customer. As noted, the fitter could renegotiate the fee with the customer and any issues with payment were for the fitter to resolve. Tapi’s only had limited involvement in resolving disputes as part of the fitting arrangement service. (b) Hence, there was a legal relationship between the fitter and the customer pursuant to which the fitter provided the fitting service (for which he was liable to any output VAT), and the customer had to pay (and did pay) directly for this service. The satisfaction of those mutual obligations represents “reciprocal performance” and the sum received by the fitter represents “consideration” for a supply of fitting services made by the fitter to the customer. (c) In Secret Hotels Med was held to be an agent/intermediary even though it sought to impose obligations on the hotel to the benefit of the customer. Similarly, here it is not inconsistent with Tapi acting as an agent for the customer that Tapi helped to get a price that the fitter would accept for the job, Tapi provided that the fitter would exercise care and skill, and Tapi made clear to the customer that the fitter was not liable for moving furniture. Tapi’s role in seeking to arrange a contract on behalf of the customer that has those terms in it, falls within the remit of its provision of a fitting arrangement service. It is part and parcel of Tapi’s role as agent to arrive at a contract on behalf of the principal that will give effect to the principal’s wish, namely, to have a carpet fitted. In so far as HMRC assert that Tapi have an interest beyond that role, in the sense of wanting the fitting to go well, that is perfectly explicable by Tapi wanting to ensure that its customers are happy because that is how it sells more flooring. (d) This position is reflected in Tapi’s accounts, drawn up in accordance with GAAP; the accounts do not include sums paid to the fitter by the customer as Tapi’s turnover. (e) This reflects the recognition in the caselaw that (absent sham or pure artifice, which is not and could not be suggested here) the contractual position normally reflects the commercial and economic reality of the transactions (see Newey at [43]).(3) It is highly relevant that the tribunal has considered a similar fact pattern recently in United Carpets which is of much more material relevance than the decisions in the cases HMRC refer to.(4) That HMRC’s case is wrong is demonstrated by the fact that, on their analysis, the monies paid by the customer must constitute consideration for two supplies (i) a supply by the fitter to Tapi, as third party consideration paid to the fitter; and (ii) the supply of a fitting service by Tapi to the customer where, on HMRC’s theory, the act of making the payment to the fitter is non-monetary consideration to Tapi because it discharges Tapi’s obligation to pay the fitter: (a) It is hard to see how one payment can be the consideration in VAT terms for two distinct, separate supplies made between different parties, not least where the fitter may not be VAT registered: the same payment, for example, of £100, cannot be both a VAT inclusive payment by the customer to Tapi (whereby Tapi would retain only £83 as Tapi would have to account for £17 as VAT) and a payment of £100 by Tapi to the fitter. There’s a strong air of unreality about HMRC’s case. (b) It is not evident how the arrangement fee can be, as it is on HMRC’s analysis, a fee in part for the provision of the fitting service and for the fitting arrangement service (both of which would be standard rated supplies). (c) Moreover, HMRC’s case assumes that (i) the fitter agrees to provide the fitting service to Tapi, (ii) Tapi agrees to provide the fitting service to the customer; (iii) Tapi and the fitter agree that the payment by the customer will discharge the obligation that Tapi owes to the fitter; and (iv) Tapi and the customer agree that the payment by the customer will discharge the obligation that the customer owes to Tapi. However, there is no evidence at all of those two contracts, and of the agreements to discharge the obligations to pay consideration. HMRC’s thesis fundamentally ignores the actual contractual relationships between the parties and rests only on an asserted “commercial and economic reality” which has no basis in the facts. The entire arrangements is predicated on the basis that the appellant acts as a disclosed agent for the customer in relation to the fitting services.(5) Mrs Crosby had not thought carefully enough about the conclusion that she arrived at. She had not considered that it might have conceptual or logical flaws in it or, before making her witness statement, whether the conclusions she had arrived at were undermined by the conclusions of her colleagues who conducted the employment tax investigation. She based her conclusions on a one hour meeting with one store manager without checking the position with the regional managers or the divisional managers, or indeed with Tapi as a whole. In a sense, whether there is a problem with HMRC’s process in reaching a conclusion does not matter much; what matters is that Mrs Crosby’s conclusion, which is reflected in the assessments, is a bad one for all the reasons given.[82]HMRC submitted that:(1) It is not correct that HMRC’s case is that the same payment must be consideration for two supplies. Tapi’s example does not reflect the actual movement of money; it is factually wrong. Moreover, at the time, Tapi did not think it was liable to pay VAT. It did not make a commercial decision to pay £100 to a fitter on the basis that it would receive only £83. It is not HMRC’s case that Tapi knowingly and deliberately set up an arrangement in which it failed to pay sufficient VAT. Tapi obviously thought that the arrangement worked as a matter of VAT law and therefore the argument, that HMRC’s stance leads to uncommercial result, falls apart.(2) Moreover, as regards commerciality: (a) On Tapi’s own evidence and case, many of the services provided by Tapi involve it using the fitter’s labour (such as, as regards the removal and disposal of carpet and certain elements of the delivery and care package) and there are no written contractual terms between Tapi and the fitters regarding that. On HMRC’s case, the provision of the fitting services by Tapi simply operates in the same way – by Tapi providing the relevant services using the fitters’ labour, in accordance with its business model. (b) Tapi’s approach is commercially unrealistic as it involves the unfeasible proposition that fitters were, on any given day, acting for Tapi and acting for themselves at different points during a fitting appointment. The customer would not understand that, for example, when the fitters are nailing in the carpet, and then vacuuming to get rid of the dust, they are really receiving supplies from two different suppliers. It is far more likely that Tapi simply continued the same business model as it accepts it already used as regards other services, in using the fitters’ labour. (c) An important point which underscores the commercial non-reality of Tapi’s argument is that Tapi charged the arrangement fee, even in “invoiced fitting” cases, where it accepts there was/is no agency. It is accepted that where Tapi buys in the services of the fitter and on supplies them it does not functionally do anything different to what it does in the cases under consideration in this appeal.[83]HMRC submitted that the caselaw referred to above establishes that the following factors are inconsistent with an agency relationship in a tripartite context such as this:(1) The absence of a separate contract between the customer and the person who performs the work. Where the contractual terms set by the purported agent govern the performance of the work, they are likely to be the principal in that supply.(2) The purported agent setting the price or selecting who performs the work. An agent would be expected to obtain proposed prices from multiple contractors if possible to present to the customer of the agency service.(3) The purported agent providing a price before a contractor has been selected.(4) A conflict of interest between the purported agent and customer.(5) The purported agent continuing to be involved with the performance of the work after the introduction of the customer and person who performs the work and being involved in resolution of complaints about the performance of the job.(6) The purported agent being involved in arrangements for the job, including re-arrangement of a time for the work to be done.(7) The purported agent proposing to the customer a particular standard of work to be performed.[84]HMRC also submitted that payment directly to the person who physically performs the work is not determinative of who the principal is.[85]HMRC made the following main submissions as regards the contractual terms and commercial and economic reality and the fact that, in their view, the factors set out above are present here:(1) There were no written contracts, nor oral contracts evidenced between the fitters and customers. That is contrary to Tapi’s terms and conditions under which it states it acts as agent. This is important and was a critical factor in Adecco. On that basis the contractual terms between the customer and Tapi do not reflect the economic and commercial reality.(2) A buyer’s agent would give its customers’ a choice over key terms but all the terms and conditions were set by Tapi; the customer had no control over the terms. Under the terms on Tapi’s website, the customer was bound under a contract with Tapi (including in relation to fitting) when the order for flooring was placed, even if the customer had only paid a deposit, before any involvement of a fitter (whose identity was not known until the day before the fitting). All meaningful control over pricing, choice of fitters and other key terms, even including those about the standard of fitting, were set by Tapi and committed to before a fitter was even allocated to a job: (a) The customers exercised no choice over any terms of fitting, including at what price or who the fitter was. Provided that the fitting job was as anticipated, a quotation given by the appellant for the fitting service was the price. It is not commercially credible that the price could be negotiated by the customer and there is no evidence that ever happened where the job was as anticipated. Tapi’s website refers to “Our fitting costs”. It is not therefore arguable that the economic and commercial reality is that either customers or fitters controlled the pricing. Tapi set it, using its admitted knowledge of the wider market. (b) Other terms of the contract between Tapi and the customer are inconsistent with agency, in particular, those providing for (i) fitters to carry out their work “with reasonable skill and care”, (ii) Tapi to monitor fitting standards, (iii) the limitation of liability of the fitters, and (iv) Tapi to manage any complaint between the customer and the fitter. Tapi could not commit the fitters or limit their liability in this way if the fitters were not subcontracting with it; if the fitters were entering into their own contracts with customers, they would be unfettered by Tapi’s requirements and specifications. Tapi simply could not limit contractual liability regarding the fitting service unless it was the party contracting to provide that service. Tapi took a continuing interest in the standard of fitting after the customer had entered into a contract with it and even managed complaints. (c) Moreover, customers wishing to use the fitting service were required to purchase the delivery and care package which included the guarantee “on all carpets purchased from and installed by us. If it is not a perfect fit, we’ll fix it!”. The economic and commercial reality is that the fitting was supplied by Tapi (“us”), not fitters pursuant to a non-existent contract with customers. That is the only sensible interpretation of these terms, whereby Tapi guaranteed the quality of the work for 10 years and agreed to fix defective fitting. A buyers’ agent would have no control over nor interest in guaranteeing the fitting standard. That is a hallmark of being a supplier. There is no reasonable analysis in which that makes commercial sense for a buyers’ agent.(3) Like in Adecco, the contractual documentation or documents explaining it include references to the fitting service being arranged “through” Tapi, which is not consistent with agency. Throughout the customer journey, not in isolated incidents, Tapi sent emails to customers, holding itself out as the supplier of fitting and setting terms (as set out above) and stating, in effect, that it was providing a single seamless service with no distinction between different elements. The tone and content of such emails, in consistently referring to “we” (Tapi) as regards supplies which Tapi contend were made by the fitters, is only consistent with (and powerfully supportive of) the economic and commercial reality being that Tapi was the supplier of fitting.(4) There is a conflict of interest if Tapi were a buyers’ agent, in it setting the price for fitting, selecting the fitter and setting terms. A true agent would act on the customer’s behalf, to obtain the best prices available through negotiations with multiple fitters (and it is evident there are different rates available for fitting services in the market) to provide a choice of fitters where possible, and to agree terms favourable to the customer; none of that happens. Even in the improbable scenario where all fitters proposed to an agent to contract for the same price, presentation of a choice of fitters would be consistent with being a buyers’ agent, given for instance the fitters’ differing expertise, reputation and experience. There is a clear conflict of interest in knowingly allocating a fitter who Tapi knows is less capable than another fitter to a job, without giving the customer the option.(5) If Tapi were a buyers’ agent its role would be to find potential fitters for customers to contract with, supply a range of suitable options and play no ongoing role. Like in Adecco, there was continued involvement by Tapi after the point when an agent would be expected to stop having involvement. That Tapi had a continuing interest in the quality of fitting, and in ensuring customers were content with the fitting service through complaints handling, is highly indicative of the economic and commercial reality being that it was the principal in that supply.(6) Moreover, Tapi had control of a level that is inconsistent with it being an agent in that it did all selection of and liaison with fitters, maintained a pool of fitters and allocated a replacement where one becomes unavailable such as through illness. Mr James told HMRC’s officers that fitters were notified of which fitting jobs they were to attend by use of a “job sheet” provided to them the day before. Clearly Tapi made the selection of the fitters; it vetted fitters, set requirements for them being in its pool, and removed them if they fail to “provide a high standard of service and act professionally”.(7) In the bundles there is an extract from the website in which the fee for fitting costs including the fee for arranging it are given as a total package and described as “our fitting costs”. There is no differentiation between the two sets of costs; the payment by the customer to the fitter is simply mixed in with the fee paid to Tapi as the fitting arrangement service fee.[86]In HMRC’s view, for the reasons set out above, United Carpets is not on all fours with this case and the decisions in Adecco, A1 Lofts and Lewis Carpets are much more instructive.[87]Tapi made the following main points in response:(1) The tribunal is entitled to test HMRC’s thesis on the basis set out by Tapi above. In order to test whether HMRC’s analysis gives the right answer, the tribunal is required to determine the contractual position and the position as a matter of economic and commercial reality. If on HMRC’s analysis, the economic and commercial position would be that Tapi would buy in a service from the fitters at £100 and sell it to the customers at £83, the tribunal is entitled to question whether that is a commercially realistic outcome. If it is not, the tribunal should re-test the conclusions by which that result is arrived at. This testing exercise cannot be resolved by discounting that commercially unrealistic result because, on HMRC’s thesis, the taxpayer would have done something it did not know it was doing.(2) It is factually incorrect that, as HMRC contend, Tapi effectively controlled all the elements of the fitting services and entirely at odds with the conclusions HMRC reached as part of their employment status investigation. HMRC corrected its own review conclusion letter in relation to the employment status investigation to remove references to the fitters in that letter as “subcontractors”.(3) A contract can be implied by conduct; there was such a contract between the customer and the fitter, for the fitter to do the fitting in the customer’s house. That contract was initially arranged through Tapi, acting as agent of the customer, when it invited the fitter to do a job for a customer on the basis of an estimated price. The fitter agreed to do that job and then arrived on site, and (a) if the fitter did the work, he did so under a contract then concluded with the customer for the agreed price and the fitter was liable for the fitting work done, but (b) if the customer decided not to accept the fitter or the fitter decided not to do the job, there was no contract and the fitter would take the carpet back to the Tapi store.(4) As regards the points HMRC make on the contractual provisions and the different services provided to customers: (a) in its role as agent, Tapi simply identified the contract which could be entered into by the customer, when the fitter arrived on site with the flooring, for the estimated price that was either accepted by the customer and fitter or adjusted, (b) there was clearly no contract between Tapi and the fitter for the fitter to provide fitting services to Tapi, (c) in the price “quotes” for the fitting service, Tapi identified rates based on the local market, which reflect the prices for which the fitters were prepared to work. They were estimates only and could be varied on site; ultimately what the customer paid the fitter was the subject of agreement between them, (d) Tapi selected the fitter, under the fitting arrangement service as agent for the customer, from the pool of fitters it could recommend who were prepared to work at those local market rates. It has a pool of fitters so that it can fulfil its promise made in return for its fee acting as agent, to help a particular customer find a particular fitter, and (e) that Tapi promised that the work done by the fitters would be done to a good standard is part and parcel of its task of finding a good fitter for the customer by way of provision of the fitting arrangement service for a fee.(5) There is no evidence of any sub-contract relationship between the fitter and Tapi as must exist on HMRC’s analysis; such an implied contractual relationship has to be implied from something. It cannot be implied from the fact that the fitter does the work in the customer’s home, fitting a carpet that belongs to the customer; that suggests a contract between the fitter and the customer. If there was a subcontract relationship, one would expect (a) Tapi to be in the discussion about complaints about the fitting service automatically in all circumstances, because it would be the party that the customer would look to, and Tapi would then have to look to its subcontractor, (b) there to be contractual terms between Tapi and the fitter as regards payment, in particular, if the customer did not pay Tapi, and (c) Tapi to ensure that it had contractual rights against the fitter in circumstances where a customer might make a claim against Tapi such as if the fitter caused damage in performing the fitting service. In fact, Tapi assisted with complaints on occasion only, the fitter took the risk of non-payment by the customer (which of itself suggests there was a contract between the fitter and the customer), and Tapi had no contractual rights against the fitter; rather the fitter’s liability was limited.(6) The delivery and care package was provided by Tapi for a separate fee; it is a separate service for a fee on which VAT was charged. Moreover, no light is shed upon the nature of the fitting service by the fact that Tapi performed some of the tasks provided for under the package and some of them are physically performed by the fitter and different fees or no fees are due for particular tasks. For example, the fact that Tapi charged the customer (by way of the arrangement fee) for some tasks that are physically done by the fitters does not render the fitters, who receive no payment from Tapi for that, as sub-contractors of Tapi.(7) There is no conflict of interest issue arising in respect of any of the relevant contractual terms and conditions; the interests of Tapi and of the customer were aligned. The customer wanted a good fitter and Tapi wanted a happy customer. Tapi was paid a fee for acting as agent in finding a fitter who would work for a particular rate for a particular job. The interests of Tapi and of the customer were fully aligned.(8) Tapi’s on-going role was performed as part of what it agreed to provide as the fitting arrangement service in return for a fee for it performing that role. In addressing customer complaints, for example, Tapi made clear to the customer and to the fitter that it was for the fitter to resolve any issues. When Tapi steps in to help with fitting issues and/or bears the cost of that, it does so to protect Tapi’s brand and goodwill. In relation to maintaining brand and goodwill in Secret Hotels Lord Neuberger said, at [46], that the fact that Med appointed its own local agents to look after holiday-makers, was not inconsistent with its status as an agent of the hotelier and is easily explicable by reference to Med’s need to maintain goodwill in the holidaymaking market. Precisely the same point applies here.(9) It is accepted that the fact that the customer pays the fitter is not determinative but it is very powerful (see [57] of Secret Hotels and [205] to [210] of United Carpets).(10) HMRC assert that the “key elements” of the fitting services supply are the same as the very small number of “invoiced fitting” supplies (not the subject of this appeal) for which Tapi charges the fitting services fee and accounts for VAT on that sum. However, this ignores the key point of differentiation between the supplies: in invoiced cases, Tapi adds the fee into the invoice issued to the customer as an “invoiced charge” and as such it appears on the customer’s order with the goods, and VAT is applied. In any event this appeal is not concerned with that situation.(11) The quotes which HMRC refer to in Tapi’s standardised correspondence with customers are taken out of context. The totality of the communications referred to above make it clear that Tapi is simply carrying out its obligations under the fitting arrangement service, by liaising with the fitter on the customer’s behalf, and does so as the customer’s disclosed agent. Further, these references to “we” and “our” do not displace the contractual position set out in the terms and conditions.(12) . HMRC’s reliance on A1 Lofts Ltd and Lewis Carpets is misplaced for the reasons set out above.[88]Tapi submitted that the officer of HMRC who dealt with the employment income/PAYE investigation appears to have accepted that the fitters were/are not subcontractors of Tapi. HMRC disputed that the officer can be taken to have made any such acceptance and contended that in any event, if the officer had done so it is not relevant to the issues in this appeal. In our view, plainly the views of an officer who conducted an enquiry for PAYE/employment income tax purposes on the status of the fitters for PAYE/employment income tax purposes has no bearing of any kind on the issues in this appeal.

Conclusion

[89]In summary, for the reasons set out in full below, we have concluded as follows:(1) We have approached the construction of the contract between Tapi and the customers in the usual way (as set out in cases such as Wood v Capita Insurance Services Ltd [2017] UKSC 24 [2017] 4 All ER 615) by seeking to ascertain “the objective meaning of the language which the parties have chosen to express their agreement”. In our view, the objective meaning of the written terms and conditions of the contract between Tapi and its customers who purchased the fitting arrangement service and related delivery and care package are plain: (a) in return for the arrangement fee, Tapi agreed to arrange, on the customer’s behalf, for a suitable fitter to attend the customer’s premises to fit flooring purchased from Tapi on the basis that the fitter would be responsible for the provision of that service at the estimated price, subject to negotiation of the price with the customer, and (b) in return for the specified fees, Tapi agreed to provide the services set out in the delivery and care package. This is reflected in the terms on Tapi’s website and in it’s in-store information and in the sales quotes and sales confirmation orders provided to customers.(2) We consider that the terminology used in, and tenor of, the standardised communications which Tapi sent to customers does not detract from our conclusion on the contract made between Tapi and the customers. A reasonable reader, reading these communications, with the background information available to such a reader, namely, the other materials presented to customers, would interpret them as meaning that “we” or “us” doing the specified activities, means Tapi acting, as appropriate, in conjunction with its “fitting partners” (as the fitters were frequently referred to), as regards the fitting service, as organised by Tapi, as specified clearly in the terms on the website, in Tapi’s stores and in the sales quote and sales confirmation order.(3) The fitter provided the fitting service to the customer under a contract concluded with the customer on the day of the fitting, in return for the fee, agreed between the fitter and the customer and paid by the customer on that day, and otherwise on terms incorporating those set out by Tapi (acting as agent for the customer) such as that the fitter would act with reasonable care and skill. On the evidence, it is reasonable to suppose that there was such a contract, in particular, from Tapi’s terms and from the evidence as to the conduct of the relevant parties.(4) We note that under English law the concept of agency is not narrowly defined, restrictive or subject to defined parameters. An agency is a “fiduciary relationship” which exists between two persons, one of whom expressly or impliedly manifests assent that the other should act on his behalf so as to affect his relations with a third party. In Maritime Stores the court endorsed the view that the effect of a contract made through a party which claims to be acting as an agent depends on the intention of the parties, “to be deduced from the nature and terms of the particular contract and the surrounding circumstances, including any binding custom”. In light of the generality of the concept of agency, whilst the type of factors which HMRC highlight, as set out at [83] above, are useful to have in mind, they plainly do not form a checklist which will be determinative of whether there is an agency relationship in all circumstances.(5) In this case, it is plain both from the contractual terms applicable to the relationship between Tapi and its customers and the evidence regarding the conduct of the parties that, on payment of the arrangement fee, the customers entrusted Tapi to act on their behalf (a) to source and put them in contact with a suitable fitter to fit the flooring purchased from Tapi, at an estimated price for the fitting service reflecting market rates, and (b) to set the necessary contractual terms/framework within which, if the fitter and the customer agreed to proceed, they would contract for the provision of the fitting service. Many of the factors which HMRC assert are inconsistent with agency are, in our view, part and parcel of the fitting arrangement service which customers paid Tapi to provide as their agent.(6) The contractual position is consistent with the economic and commercial reality of the arrangements. In particular, we note that (a) the fitters attended the customers’ premises to fit the flooring and, as the experts in their field who physically performed the work, were liable for the service provided to the customers, and the customers were liable to pay the fitters the fitting fee, set at the market rate (where appropriate, subject to negotiation with the fitter), for doing so, and (b) Tapi was paid a fee by the customer for its role in arranging the attendance of a suitable fitter to fit the flooring, which the customer had purchased from it, and fees for the other services it provided under the delivery and care package.(7) Accordingly, for VAT purposes, having regard to the principles set out in the caselaw, on the basis that under English law the contractual arrangements operate as set out above and that the economic and commercial reality reflects those arrangements, during the relevant periods (a) Tapi supplied the arrangement service to customers for the arrangement fee, on which Tapi duly charged VAT, and (b) the fitters supplied the fitting service to the customers, as principal, in return for the fitting fee, on which VAT would be due, if the fitter was registered for VAT.[90]We do not consider that there is any basis for a conclusion that there was an implied contract between Tapi and the fitters for the fitters to provide their fitting services to Tapi and /or that the contract between Tapi and the customer can be regarded as made for the provision of fitting services by Tapi to the customer (as fulfilled physically by the fitters). On all the evidence, it is reasonable to suppose that the arrangement between the fitters and Tapi extended at most to the following:(1) An understanding that each vetted fitter included in the pool would be considered by Tapi for suitable fitting work.(2) If, at Tapi’s discretion, the fitter was matched with a customer, depending on whether (at the fitter’s discretion) the fitter accepted the job for the customer or not, it appears there was an agreement that the fitter would undertake certain actions: (a) If, on the day he attended the customer’s premises, the fitter chose to accept the job (where relevant, on negotiation of the final price), the fitter agreed that (i) in contracting with the customer to perform the fitting service, the terms would include those specified by Tapi (acting as agent for the customer), such as that the fitter would act with reasonable skill and care, (ii) the fitter would undertake, on Tapi’s behalf, certain tasks necessary for, and/or ancillary to, the performance of the fitting service, which Tapi contracted with the customer to provide under the delivery and care package, such as picking up the flooring from Tapi and delivering it, removing a reasonable amount of furniture, tidying and vacuuming and bringing old flooring removed back to Tapi’s store to be disposed of. The evidence is that the terms specified by Tapi as applicable to the fitters’ performance of the fitting service are industry standard terms and that it is usual in the flooring industry for fitters to undertake the tasks outlined in (ii) above for Tapi without any additional/separate charge by the fitters. (b) If the fitter attended the customer’s premises but chose not to accept the job (for example, if a price could not be agreed), the fitter agreed to return the flooring to Tapi. Tapi would, if necessary, source a different fitter.[91]On the evidence, it is plain that as regards the relationship between Tapi and the fitters(1) there was no legal obligation (a) on Tapi to provide fitting work or a certain level of work to fitters, (b) on fitters to make themselves available to Tapi, (c) on fitters to provide work to a specified standard; that requirement applies to any agreement made between the fitter and the customer, should the fitter accept the work for the customer, and (d) on Tapi to pay the fitters for the work which the fitters physically performed for customers, and(2) there was no legally binding agreement (or any understanding or expectation) between Tapi and the fitters as to what would happen if customers did not pay the fitting fee to the fitter or if the customer complained about the fitting service. Tapi undertook obligations to the customer in the event of dispute between the customer and the fitter (as part of its role under the fitting arrangement service and under the guarantee) but not to the fitter. The fact that Tapi monitored the fitters’ performance through feedback from customers is explained by its desire to protect its goodwill/brand. It had no legal recourse against fitters for any failure to perform jobs satisfactorily (or for failure to accept jobs). The ultimate sanction would simply be no longer to include the fitter in the pool/offer the fitter jobs. Essentially, the relationship between Tapi and the fitters operated flexibly and relatively informally, as underpinned by shared commercial interests and standardised industry practices.[92]In light of the findings we have made, we do not consider that, as HMRC suggested, the fact that Tapi undertook contractually to provide services such as those listed in [90(2)(a)(ii)] but the fitters physically performed them of itself indicates that the arrangement was the same as regards the fitting service. The fact is that there were different contractual arrangements in respect of the different elements of the service provided. We see no material relevance in the fact that, as HMRC submitted, as the fitting service and related tasks were being performed, customers were not necessarily cognisant of who was responsible for each element such as the delivery, vacuuming and removal of old flooring. Who was contractually responsible for the different elements was set out in Tapi’s terms and conditions which were readily available for customers to consult should they need to do so, such as in the event of a dispute. Nor do we consider it relevant to our analysis to assess what happened in “invoiced fitting” cases and how similar or otherwise the arrangements were in those cases compared with the arrangements where Tapi provided the fitting arrangement service. The correct VAT position in “invoiced fitting” cases is not part of this appeal and determining the correct the VAT position where Tapi provided the fitting arrangement service requires assessing the contractual and commercial and economic effect of those arrangements.[93]We can see nothing artificial, uncommercial or uneconomic in the operation of the relevant contractual arrangements and/or that the substance of the contractual arrangements does not reflect an agency arrangement. As the witnesses explained and in some respects is apparent from the documentary evidence, Tapi did not want to employ/ engage a team of fitters (due to issues such as cost concerns) but wished to provide customers with a seamless full package of services and, due to its position in the flooring market, was well placed to maintain a pool of suitable, vetted fitters with the requisite skills, and to match particular fitters to customers’ floor fitting needs. In that context it makes sense that:(1) From a business and commercial perspective Tapi would want to divide contractual responsibility, as it did, so that, in effect, fitters took contractual responsibility to the customers for the fitting service provided and took the economic risk as regards payment for the service by the customers, as the fitters ultimately set the fitting fee and were responsible for the performance of the fitting service, albeit that (a) as part of the delivery and care package Tapi contracted to assist (and in practice did assist) with customers’ complaints about the fitting service, and (b) in some circumstances, it contracted to provide a guarantee to customers as regards the fitting service (we have commented further on that below).(2) Independent fitters would accept being included in Tapi’s pool in order to access Tapi’s extensive customer base, which it had due to its position in the market as a leader in flooring supplies, on the basis that, as providers of the fitting service, as experts in their field who physically performed the fitting, they were contractually responsible to the customers for the provision of the fitting service and accordingly took the benefit of payment for the service and the corresponding risk of non-payment. We have commented further on the extent of any agreement between Tapi and the fitters below.(3) Customers, who it is reasonable to suppose would not have knowledge of the fitting business/market, wished to avail themselves of Tapi’s knowledge and skills in arranging the fitting service through Tapi, by purchasing its fitting arrangement service and related delivery and care package, on payment of the fees charged by Tapi for those services.(4) On the evidence, there is no reason to suppose that either the arrangement fee and/or the fitting fee (or any other fees charged by Tapi) were uncommercial or uneconomic. We have commented further on the fitting fee below. The arrangement fee was agreed between independent parties; customers were free to take the fitting arrangement service (and thereby the related delivery and care package) or make their own arrangements for fitting of flooring purchased from Tapi. HMRC submitted that the price paid to the fitter is a “wholesale” price and the arrangement fee represents a “retail” price but there is no evidence supporting that view. As a general matter, Tapi bears the burden of proof to demonstrate that (on the balance of probabilities) the assessments are not correct. However, if HMRC wish to rely on a particular fact in support of their stance, in particular, where Tapi has made a prima facie case on the evidence that supports a contrary position (as we consider is the case here), it is incumbent on HMRC to provide some basis for the asserted factual position.[94]We do not accept HMRC’s contention that it is incompatible with an agency arrangement that(a) Tapi provided an estimate of the price for the fitting service (whether categorised as a “price quote” or not), and(b) Tapi did not provide the customer with a choice of fitter and concluded its contract with the customer before a particular fitter was identified for a customer who had chosen to avail himself of Tapi’s fitting arrangement service: (1) We note that, on the evidence: (a) The estimated price for the fitting service given to customers in the sales quote and sales confirmation order was set by Tapi, by reference to Tapi’s assessment of market rates, as in part informed by the fitters themselves and by what competitors were charging. (b) As was made clear to customers, throughout the process, the fitting fee stated to them by Tapi was an estimate only and there was at least some scope for negotiation between the fitter and the customer: if the fitter considered a different fee was due on attending the customer’s premises, the fitter was free to seek to negotiate the fee with the customer albeit, in practice, that was likely to occur only if the job was different to what was expected when Tapi made the estimate. It is reasonable to suppose that the price estimated by Tapi would be the actual price assuming the fitting job was as expected, as the estimated rate was based on market rates/the fee a fitter would accept, and the fee was quoted on the basis of what the fitting job was expected to involve.(c) Tapi sought to match the customer with a fitter with the requisite skills necessary to fit the relevant flooring in the relevant location. The purpose of Tapi maintaining a pool of fitters, whom it vetted, was to ensure that it could meet it’s obligation to those customers, who chose to use its fitting arrangement service, to arrange for a suitable fitter to fit the customers’ chosen flooring in their chosen location. There is no evidence to support HMRC’s contention that these arrangements resulted in Tapi matching customers with fitters who were not suitable for the job.(d) It is reasonable to suppose that, in such circumstances, the customers were not concerned with knowing in advance the identity of the particular fitter who would attend their premises. It seems to us that customers were unlikely to wish to be presented in advance with a range of fitters to choose from and/or that customers would wish to be presented with a range of fitting fee quotes for them to consider. The sourcing of a fitter willing to do the customer’s job at market rates (subject to negotiation if the job was not as expected) is precisely (in part) what they were paying Tapi to do by way of the arrangement fee. The evidence is that flooring installation follows a fairly standard process/approach and the market is very transparent when it comes to pricing of fitting jobs such that it seems unlikely that there would be much variation in pricing. Hence, Tapi were able to provide appropriate fee estimates based on the expected work. (2) In effect, therefore, customers who chose to use the fitting arrangement service, thereby specifically chose to engage Tapi, on payment of the arrangement fee, to select a suitable fitter on their behalf on the basis of an appropriate market rate fitting fee estimate which was highly likely to be acceptable to the fitter. The point of this arrangement with Tapi from the customers’ perspective, as makes sense for the reasons set out above, was that the customers would not be concerned with arranging such matters themselves. Rather, they appointed Tapi and paid it a fee to take the necessary steps on their behalf to arrange for a suitable fitter, who was willing to do the work at a market rate, to attend the customer’s premises and, subject to any required negotiation on the day, to do the fitting job. Customers were plainly relying on Tapi, as a market leader in the flooring industry, with all its contacts and expertise, to source and put them in touch with a suitable fitter on that basis. In that context, it would make no sense for Tapi to provide customers with a range of fitters for them to choose from or with a range of separate price quotes from fitters. (3) We do not consider that it follows from the customers’ evident reliance on Tapi to perform these functions, as HMRC suggest, that Tapi was, in effect, buying in the fitting service from the fitters and undertaking contractual responsibility for the onward provision of the fitting service to the customers (whether through a form of sub-contracting arrangement or otherwise). Tapi was careful, both in the terms and information on their website and in written information and oral explanations given to customers in store, to make it clear that, in performing this function, Tapi was not assuming contractual responsibility for the fitting work performed by the fitters (albeit they had some limited responsibilities under the delivery and care package and some customers benefitted from a guarantee, as we have commented on below). As Lord Neuberger commented in Secret Hotels “one must be careful before stigmatising the contractual documentation as being “artificial”, bearing in mind that EU law, like English law, treats parties as free to arrange or structure their relationship”. Moreover, as noted, under English law, the concept of agency is not narrowly defined, restrictive or subject to defined parameters. The parties were free to arrange matters as they did, on the basis essentially that Tapi would arrange and facilitate the fitting service but the fitters would ultimately provide and be responsible to the customers for the fitting work performed, as reflected in the different fees paid by the customer to Tapi and the fitters. In any event, for all the reasons set out in these conclusions, the arrangements do not embody an artificial division of roles and responsibilities. There are clear commercial and practical reasons why matters are organised in this way.[95]We do not accept HMRC’s arguments that(1) some of the written contractual terms show that Tapi’s interest in the fitting service was wider than that of a mere agent in that it set contractual terms which would apply between the fitter and the customer such as that the fitter would take reasonable skill and care in performing the fitting service and would not be liable in certain respects. As noted above, the evidence is that these are standard terms in the flowing/fitting industry, and(2) Tapi’s role was incommensurate with that of an agent in that it provided on-going monitoring of the fitting arrangements (such as through feedback from customers) and support by way of assisting in complaints and, in certain circumstances, provided a guarantee of the fitting service. Similarly to the findings made in Secret Hotels in relation to similar arguments put by HMRC, these factors are readily explained by Tapi’s powerful negotiating position due to its substantial goodwill in the flooring market and that it wished to protect and enhance that goodwill/Tapi’s brand. Tapi plainly had a business interest in ensuring that the fitting service was performed to the customers’ satisfaction and in assisting with issues on that score. Hence, it was able to dictate to some extent the terms on which, if the fitter accepted the job, the fitter would supply the fitting service, and Tapi was willing to undertake certain responsibilities. We note also that Tapi was paid a fee by the customer for providing services under the delivery and care package and VAT was charged by Tapi on these standard rated services accordingly.[96]It follows from the points made above that we do not consider that the arrangements relating to the fitting service involved Tapi in any material conflict of interest as regards relations with Tapi’s customers. As Tapi submitted, Tapi’s interests in respect of the fitting service and those of it’s customers in respect of that service were aligned: Tapi, as a market leader and expert in the flooring business, wished to protect and enhance that business by ensuring customers who purchased its flooring were provided with the ability to arrange through it, a satisfactory floor fitting service, and customers who took the fitting arrangement service option, wished to avail themselves of such a service, as arranged by an expert, with all it’s contacts, in the flooring market.[97]HMRC argued that the analysis for VAT purposes is as they argue for, even if the tribunal does not find that the contractual arrangements operate as they contend. However, overall it seems that HMRC’s analysis is based on a view of the arrangements which they consider Tapi should have adopted as opposed to those which it actually adopted (with their consequent legal effects):(1) In short, a supply of services is effected for consideration only if “there is a legal relationship between the provider of the service and the recipient pursuant to which there is reciprocal performance” (emphasis added).(2) To recap, HMRC’s argument is, in effect, that the fitters supplied their fitting services to Tapi (or agreed to fulfil Tapi’s obligation to the customers): (a) as regards the arrangements between Tapi and the fitters on the basis that (i) the value to Tapi is that the fitters would provide the fitting service to its customers, and (ii) the value to the fitters is that Tapi’s obligation to pay them for doing so would be met by them receiving funds direct from the customers, and (b) as regards the arrangements between Tapi and the customers on the basis that (i) the customers would receive the fitting service, and (ii) Tapi would receive (A) the arrangement fee from the customers, and (B) by the fitters accepting direct payment from the customers, the benefit of the fitters relieving Tapi of the “administrative burden” of collecting the fitting service fees and of the risk of non-payment by the customers.(3) It seems to us that there are a number of difficulties with this analysis: (a) there was no legal relationship between the relevant parties for “reciprocal performance” of the kind HMRC argue existed. Under English law, any such legal relationship would be founded on the contractual arrangements between the parties; on any construction of those arrangements, there is no undertaking by any of the parties involved of any the obligations upon which HMRC’s analysis is founded, and (b) it is out of kilter with economic and commercial reality. In particular, the question arises why fitters would agree to deal with payments from customers and thereby take the risk of non-payment of a price which, on HMRC’s case, was set by Tapi and which the fitter could not negotiate. It is reasonable to suppose that, in such circumstances, the fitters would expect (i) to be paid by Tapi, the party who, on this analysis, HRMC suggest was ultimately accountable to the customers for delivery of the fitting service and setting of the price for it, and (ii) to receive payment regardless of whether Tapi had any difficulty in recovering the fitting fee from the customer.[98]In making our decision, we have had in mind the decisions in the cases which the parties argued contain similar facts to those in this case and/or that the factors weighing for or against agency in those cases also apply in this case. However, we have found a comparison with those other cases to be of limited value, given that those cases generally do not set, extend or add to the relevant legal principles; they simply illustrate the application of those principles on the particular facts applicable to each case. Our task is similarly to apply the relevant legal principles established in the higher courts, in the context of the specific facts of this case.

Conclusion and right to appeal

[99]For all the reasons set out above, the appellant’s appeal is allowed.[100]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 05 August 2026