Expert Witness - Trade or not?
A client who is employed full time has been asked by another company to appear as an expert witness.
His own Company has OK'd this but has also confirmed they do not cosider it to be anything to do with his employment by them and therefore not part of his employment income.
He has been offered a fee of around two hundred pounds a day.
He has never done this before, is not expecting to do this again and did not in any way advertise or suggest that he was looking for this sort of work.
As far as I can tell, based on the badges of trade, this isn't a trade. Has anyone else had a similar situation - what was your conclusion? Can we just list this on his return as other income? - he'll still pay the tax but it'll avoid the hassle of registering, paying the class 2 and filling in the SE pages on the return.
I'd be very interested and grateful for either experience or opinions.
Many thanks
BG
Acting as an expert witness
You don't say what field it is in which he has expert knowledge, but if he is to give 'expert' evidence it has to be expertise that a court will recognise.
Typically experts are professionally qualified in their field or have a CV establishing their standing. So for example you can have experts in medicine (of various disciplines), accountancy, DNA or fingerprint analysis, ballistics, analysis of fibres or soils, examination of CCTV images, etc, etc. But you might have difficulty calling, say, an expert astrologer as the court might not recognise astrology as an expertise worthy of the name.
It is usual for the expert first to prepare a written report and for this to be provided to the court and the other side in advance of the hearing.
An expert witness is there to assist the court in an area in which the normal layman would not have sufficient expertise. He is there to offer the court his expert opinion - whereas 'non expert' witnesses are not normally permitted to express their opinions (they simply report the facts of what they saw or heard).
It sounds as if this is a civil case (not a criminal one) so it is likely to be in the High Court (rather than the Crown Court) and to be subject to the Civil Procedure Rules (rather than the Criminal Procedure Rules).
Part 35 of the Civil Procedure Rules are particularly relevant to expert witnesses, see
www.justice.gov.uk/civil/procrules_fin/contents/parts/part35.htm
He also needs to be aware of the related Practice Direction, see
www.justice.gov.uk/civil/procrules_fin/contents/practice_directions/pd_part35.htm
The solicitors who instruct him ought to be able to give him some guidance on what is required.
The expert is likely to be subject to cross-examination in court by the barrister or solicitor instructed by the other side. They may also have an expert of their own. In that event there may be a meeting of the different experts before the hearing date to establish how far they agree, and to clarify their disagreements. (Such a meeting is not however a meeting to negotiate a compromise.)
An expert witness should be objective and unbiased in his evidence. He is not there to 'win the case' on behalf of those who have instructed him. If he appears to take a one-sided view the court may attach little weight to his opinion.
It's interesting work - but challenging!
I agree with W_D / C_D about the taxation of the income. Hopefully his travel and accommodation costs will be met by those who instruct him. He should, of course, retain his receipts.
Depending upon his area of expertise, £200 per day for attendance at court sounds good value. An expert such as an accountant would be looking for a minimum of £450 per day for court attendance.
David
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Payment for expert testimony is a "trade" IF he did it regularly.
As this is a "one off" the income would need to be declared as "other income" after deduction of his reasonable expenses (travel, overnight accomodation etc).