TaxPersonal TaxCourt ruling ends IR35 uncertainty

Court ruling ends IR35 uncertainty

The Court of Appeal's decision to reject the Professional Contractor Group's case against the hated IR35 rule will lead to a glut of cases involving IT staff, according to legal experts.

Having had its appeal rejected, the PCG has vowed to continue fighting against the tax. It had argued that its members, who are primarily small independent contractors, should be treated as such and not as employees for taxation purposes.

IT managers are likely to face significant challenges in attempting to clarify whether their staff would be regarded as employees or contractors, explained John Salmon, partner at law firm Masons.

‘The situation is unclear at present,’ he said. ‘No one knows for certain how the rules will be applied.’

However, the Inland Revenue has expressed its delight at the verdict, claiming the ‘uncertainty’ caused by the case was now over.

An official Revenue statement read: ‘The government is pleased that the Court of Appeal has confirmed the judgement given in the High Court in April that the service company legislation is not contrary to European Community law. ‘The uncertainty caused by this case can now come to an end. The service company legislation was necessary to ensure fair taxation of all workers, whether or not they use a limited company to arrange their contracts.’

More details of test cases against IR35 are now expected to emerge at the end of this month.

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

4d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

3w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter