In the latest of a recent stream of IR35 news events, a contractor has won their appeal of a HMRC First Tier Tribunal decision going back to 2016, relating to the tax years 2012/13 and 2013/14.
Critical to the decision was the fact that the end client did not exercise control over the engagement with the taxpayer, this is because the supervisor only visited the site occasionally and that the taxpayer was largely left to his own devices.
However, this decision, though good for the taxpayer, creates further questions around the application of IR35. Andy Chamberlain, deputy director of policy at the Association of Independent Professional and the Self Employed (IPSE) is reported to have commented:“HMRC looked at the relevant factors and decided that IR35 should apply. The Tribunal looked at those same factors and decided that it shouldn’t. If HMRC, with all its expertise, seemingly cannot make a correct determination, how are public authorities and individual businesses supposed to get it right?”
Several commentators have also criticised the Check Employment Status for Tax (CEST) tool in light of this decision on the basis that this is as the result of an appeal and therefore different people have reached different conclusions based on the same facts – it therefore follows that an algorithm could not give a reliable assessment. Chamberlain has challenged HMRC to put the judgement through the CEST tool to check the outcome.
The case does not set any case law precedent, owing to it being a First Tier Tribunal, so it will be interesting to see whether HMRC further appeal the latest decision as it goes against the recent victory in the recent BBC presenter case at a time when IR35 in the private sector is being considered.
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