IR35 appeal success

[northernladuk]

"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.

Ahh.. OK. So it's SD now not SDC seems C is neutral to us.

[jamesbrown]

Kinda exonerates us all really doesn't it?

FWIW, I think you're tying yourself up in knots here.

The quote to which you refer alludes to the case law that SDC, specifically the "how" element of control, is less important for a skilled professional, which is essentially the opposite of what you're saying. However, even that isn't straightforward. A skilled professional among skilled professionals can be controlled on the "how", as well as other elements.

IR35 has always been an exercise in balance and subjectivity. If that's your gripe, I'm afraid you're going to be angry indefinitely

This case, as with many cases, appears quite finely balanced to me, but it's also clear how the case was won, namely lack of SDC. There's nothing particularly magical about it; their judgement in the round was that a sufficient degree of SDC was not present.

[jamesbrown]

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.

Right, but these changes have no impact whatsoever on the test applied in case law. So IR35 remains a mess of their own creation, only now they can circumvent it more easily. Basically, they've had a night on the town with nlady, puked over their carpet, and decided to walk around it every morning, rather than clear it up.... but, look, they now have some air-freshener, yay

[washed up contractor]

This was a construction worker, wasnt it? Yeah, I know all about the pillars and principles being the same etc but I really wonder if he had been an IT contractor whether the ultimate decision would have been the same.

[WordIsBond]

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

Thanks for telling me what the engager said. My comment might have clued you in to the fact I knew what he said.

If the contractor had been represented by someone like Kate Cottrill, methinks she'd have challenged the engager on that point, and asked them if the agency had sent a substitute who just happened to be provided by MDCM, would they have rejected the substitute or not? If so, why, since they accepted other substitutes? If not, then there was a right of substitution.

The client didn't think through what he was saying. HMRC was happy to have his initial statement stand. The contractor was representing himself and lost a chance there. If someone sharp had been questioning the client, the right of substitution might have stood in this case as well.

[billybiro]

Why are you upset with him? HMRC screwed up their argument.

If you, I or most people here ended up with an investigation it wouldn't get as far as going to a tribunal.

Indeed. It may not ever be about the final verdict, win or lose for HMRC.

What are the "lost opportunity" costs for a contractor involved in an investigation? Seems it's largely a war of attrition, and HMRC has the capacity to outlast any contractor by tying them up in red tape.

As a contractor, you may ultimately win (and even withstand "appeals" from HMRC against the verdict) but it'd be a Pyrrhic victory if you've not been able to work (i.e earn money) for a significant chunk of time whilst the (protracted) investigation was ongoing.

I think *this* is the real thing contractors should fear, far more than the result itself. After all, those lost opportunity costs could actually amount to more money than that "unpaid tax" HMRC is going after you for.

[SueEllen]

Indeed. It may not ever be about the final verdict, win or lose for HMRC.

What are the "lost opportunity" costs for a contractor involved in an investigation? Seems it's largely a war of attrition, and HMRC has the capacity to outlast any contractor by tying them up in red tape.

As a contractor, you may ultimately win (and even withstand "appeals" from HMRC against the verdict) but it'd be a Pyrrhic victory if you've not been able to work (i.e earn money) for a significant chunk of time whilst the (protracted) investigation was ongoing.

I think *this* is the real thing contractors should fear, far more than the result itself. After all, those lost opportunity costs could actually amount to more money than that "unpaid tax" HMRC is going after you for.

You are able to work while an investigation is happening but you and other members of your household will be under a lot of stress.

[TonyF]

As a contractor, you may ultimately win (and even withstand "appeals" from HMRC against the verdict) but it'd be a Pyrrhic victory if you've not been able to work (i.e earn money) for a significant chunk of time whilst the (protracted) investigation was ongoing.

I think *this* is the real thing contractors should fear, far more than the result itself. After all, those lost opportunity costs could actually amount to more money than that "unpaid tax" HMRC is going after you for.

What would stop you from working during the investigation (apart from if you're too ill to work through stress)?

[PerfectStorm]

I'm not upset with him. Dunno, just felt annoyed after reading through it. I'll have a look again tomorrow.

What you're seeing here is the difference between IR35 theory and IR35 reality. The vast amount of contractors aren't as engaged in it as some of the - er - theorists on here.

[SueEllen]

This was a construction worker, wasnt it? Yeah, I know all about the pillars and principles being the same etc but I really wonder if he had been an IT contractor whether the ultimate decision would have been the same.

Thing is not everyone in IT does the same thing so you can't tell.