IR35 appeal success

[northernladuk]

Substitution shouldn't have stood up, either. When he couldn't make it, they did accept a substitute. His representative should have challenged the engager on that point. "You called the agency and asked for a substitute when he couldn't make it, and accepted the substitute they sent. If the agency had phoned him, and he had provided a qualified substitute to the agency, would you have refused that substitute?" They clearly were willing to accept a substitute.

I don't agree. They were but not from MDCM. Dress it up as you want but that was the stance of the engager.

They did not ask Mr Daniels to provide one nor would they accept that Mr Daniels was entitled to provide one.

[northernladuk]

As expected I'm not annoyed today. I think what got my goat reading it was how easy it was to pass. I'm absolutely aware what JB and WiB say about the pillars but so many other flags we have to be aware of just fall by the way side. Providing gear, substitute, open ended contract and much more all bad flags but not worth a whistle just because he isn't controlled. And by the comment in the judgement about control. The phrase used

Where the worker is a skilled professional then control is less important and in the case of an expert, neutral in determining the employment status.

Kinda exonerates us all really doesn't it? So as long as you are skilled professional you pass SDC and it doesn't matter whatever other flags you raise you can't be anything but outside.

I think what did annoy me yesterday was the farce IR35 is and how badly HMRC have implemented it. I don't know why this case hammers it home any more than other ones.

[mudskipper]

As expected I'm not annoyed today. I think what got my goat reading it was how easy it was to pass. I'm absolutely aware what JB and WiB say about the pillars but so many other flags we have to be aware of just fall by the way side. Providing gear, substitute, open ended contract and much more all bad flags but not worth a whistle just because he isn't controlled. And by the comment in the judgement about control. The phrase used



Kinda exonerates us all really doesn't it? So as long as you are skilled professional you pass SDC and it doesn't matter whatever other flags you raise you can't be anything but outside.

I think what did annoy me yesterday was the farce IR35 is and how badly HMRC have implemented it. I don't know why this case hammers it home any more than other ones.

SDC is the crux of it - there is no "master/servant" relationship.


From previous tribunal, but quoted in this one

"in order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a checklist to see whether they present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of the evaluation of the overall effect of the detail, which is not necessarily the same as a sum total of the individual details. Not all details are equal weight or important in any given situation. The details may also vary in importance from one situation to another."

And that's the problem here - a CEST tool is never going to be able to achieve that level of sophistication.

[Hobosapien]

...
Either way, the more case law generated, the clearer it becomes that IR35 is totally unworkable (if that were really needed).

That's why they're now changing the rules so the client determines IR35 status, currently in public sector but likely also in private sector next April.

A lot easier to scare clients into doing blanket inside determinations as they don't want the risk or hassle of working out what working practices would guarantee an outside determination, so easier for them to swallow the higher cost of paying contractors more to offset IR35. Result is client gets an easier life and no comeback, HMRC get their tax to prove 'IR35 is working', and contractors get ever closer to disguised permiedom (taxed at source so no benefit contracting via ltd) without the employee safety net.

Just need the rate uplift to be able to afford all the employee benefits if desired, and to decide what to do with your ltd if umbrella or agency payroll are the only workable options.

[northernladuk]

So I've seen some comments about this being a borderline case and it was 50/50 and that an appeal from HMRC will most definitely be in the offing.

Where does this come from? The fact that there are IR35 fails all over the place but he passed on the one main pillar? Someone's opinion?It would be useful to know exactly how close a call this was to allow us to put some weight to the areas that failed and so on.

[mudskipper]

So I've seen some comments about this being a borderline case and it was 50/50 and that an appeal from HMRC will most definitely be in the offing.

Where does this come from? The fact that there are IR35 fails all over the place but he passed on the one main pillar? Someone's opinion?It would be useful to know exactly how close a call this was to allow us to put some weight to the areas that failed and so on.

Whatever happens, it provides further evidence for the argument that IR35 status is a complex issue, and a few simple questions are not enough to give an accurate determination in most cases.

[northernladuk]

Whatever happens, it provides further evidence for the argument that IR35 status is a complex issue, and a few simple questions are not enough to give an accurate determination in most cases.

But that's not what this ruling is telling me. It's telling me you get D&C right and the rest is a waste of time. Sorted.

Going back to the statement again...

Where the worker is a skilled professional then control is less important and in the case of an expert, neutral in determining the employment status.

I'm ITIL Expert qualified. That's the expert option covered so I'm in the clear for D&C. I don't need to lift another finger around IR35. My RoS can be a sham, open ended contract, using client provided gear, even the hint of MoO but it doesn't matter. I'm sorted.

Not really getting my thoughts over very clearly and not easy to have a discussion/debate on here to be fair so think I ought to just can it and just be happy IR35 is even less enforceable than I actually realised.

[MyUserName]

Not really getting my thoughts over very clearly and not easy to have a discussion/debate on here to be fair so think I ought to just can it and just be aware that IR35 is even more arbitrarily enforced than I actually realised.

FTFY

[sal]

That's why they're now changing the rules so the client determines IR35 status, currently in public sector but likely also in private sector next April.

A lot easier to scare clients into doing blanket inside determinations as they don't want the risk or hassle of working out what working practices would guarantee an outside determination, so easier for them to swallow the higher cost of paying contractors more to offset IR35. Result is client gets an easier life and no comeback, HMRC get their tax to prove 'IR35 is working', and contractors get ever closer to disguised permiedom (taxed at source so no benefit contracting via ltd) without the employee safety net.

Just need the rate uplift to be able to afford all the employee benefits if desired, and to decide what to do with your ltd if umbrella or agency payroll are the only workable options.

Don't really agree with that bit. It didn't even work for all of the public sector, plenty of PS contracts are declared outside. Yes there was initial shock&awe effect caused by the tight deadlines and the general tardiness of the PS decision making, which cased some organisations to blanked declare inside IR35. But after the initial storm a lot of them took the effort to apply some thinking.

Not to mention that in the case of the PS it's false economy - the extra tax collected comes at the extra cost for rate uplifts paid by the PSB budgets that are in most cases tax payer funded in the first place.

With the Private sector it will be completely different - just like you as a private sector business can engage with QDOS etc. to review contracts and take insurance - so can the ClientCo. It's simple cost-benefit analysis in which paying for 3rd party review and insurance will be cheaper that blanked rate uplifts and driving out contractors in 99% of the cases.

[base]

But that's not what this ruling is telling me. It's telling me you get D&C right and the rest is a waste of time. Sorted.

Going back to the statement again...



I'm ITIL Expert qualified. That's the expert option covered so I'm in the clear for D&C. I don't need to lift another finger around IR35. My RoS can be a sham, open ended contract, using client provided gear, even the hint of MoO but it doesn't matter. I'm sorted.

Not really getting my thoughts over very clearly and not easy to have a discussion/debate on here to be fair so think I ought to just can it and just be happy IR35 is even less enforceable than I actually realised.

"Where the worker is a skilled professional then control is less important and in the case of an expert, neutral in determining the employment status."

How are you deducing that you are in the clear? The way I interpret this sentence is that neutral means that, in the case of an expert, this 'pillar' is irrelevant, disregarded, not that it's an automatic pass.