TaxPersonal TaxRevenue gives way on IR35 claim

Revenue gives way on IR35 claim

A contractor has avoided the impact of IR35 despite having almost exactly the same circumstances as an earlier taxpayer who was forced to pay over 50% of his company turnover in tax under the same legislation.

Link: IR35 Special area

The contractor was the subject of a PAYE compliance investigation launched by the Revenue in 2002.

The case involved virtually the same facts as those that applied to Gordon Stutchbury of Synaptek, who earlier this year failed in his IR35 High Court appeal.

John Whiting, tax partner at Big Four firm PricewaterhouseCoopers, said the decision by the Revenue status officer not to apply IR35 was ‘a useful few straws in the wind’ and demonstrates that the Inland Revenue ‘is persuadable’.

‘It shows that your case is distinguishable from cases that have gone before,’ he said.

Michael Brophy, senior consultant at Lawspeed, the specialist adviser in the case, said the key lesson was that it pays to get quality representation from the outset. ‘It is about paying attention to detail,’ he said. ‘The case highlights the fact that the Inland Revenue is quite easy to beat.’

One of the key issues of the case is that the contractor had worked on a project rather than as part of a team.

Gordon Stutchbury, an ex-policeman from Sunderland, lost his High Court appeal because the Revenue labelled him a ‘disguised employee’ of computer services giant EDS, and so subject to IR35.

Simon Griffiths, chairman of the Professional Contractors Group, agreed with Brophy, saying that ‘appropriate professional advice at the earliest possible stage may have a crucial effect on the result’.

Email David_Rae@vnu.co.uk.

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

2d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w 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