IR35 appeal success

**poorautojobber** · 26 March 2018, 18:10

Think they may appeal this one surely they can't be seen to have lost (again)? What's the actually score for them win/lose/draw over the last 20 years.

**mudskipper** · 26 March 2018, 18:29

Decision can be found here MDCM Ltd v Revenue and Customs (INCOME TAX/CORPORATION TAX : Personal service companies (IR 35)) [2018] UKFTT 147 (TC) (19 March 2018)

**northernladuk** · 26 March 2018, 19:02

Originally posted by mudskipper View Post

Decision can be found here MDCM Ltd v Revenue and Customs (INCOME TAX/CORPORATION TAX : Personal service companies (IR 35)) [2018] UKFTT 147 (TC) (19 March 2018)

Well all that is a bit of a joke isn't it. Looks like it's time to re-write 18 years worth of IR35 guides cause he got away with a load of stuff that is key in many guides. If it's so easy to win an appeal with so many so called IR35 red flags then what's the point of even trying to stay outside?

If he can get away with that what is the point of IR35 insurance and professional representation? They are making money for doing nothing it appears.

He's won and good on him but for some reason I'm slightly annoyed by all that.

**SueEllen** · 26 March 2018, 20:09

Originally posted by northernladuk View Post

Well all that is a bit of a joke isn't it. Looks like it's time to re-write 18 years worth of IR35 guides cause he got away with a load of stuff that is key in many guides. If it's so easy to win an appeal with so many so called IR35 red flags then what's the point of even trying to stay outside?

If he can get away with that what is the point of IR35 insurance and professional representation? They are making money for doing nothing it appears.

He's won and good on him but for some reason I'm slightly annoyed by all that.

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.

**northernladuk** · 26 March 2018, 20:10

Originally posted by SueEllen View Post

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.

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

**mudskipper** · 26 March 2018, 20:32

The CEST tool gives 'undetermined'.

Dave Chaplin's posted his analysis - took a slightly different route at the end, but the same outcome.

**jamesbrown** · 26 March 2018, 21:01

Originally posted by northernladuk View Post

Well all that is a bit of a joke isn't it. Looks like it's time to re-write 18 years worth of IR35 guides cause he got away with a load of stuff that is key in many guides. If it's so easy to win an appeal with so many so called IR35 red flags then what's the point of even trying to stay outside?

If he can get away with that what is the point of IR35 insurance and professional representation? They are making money for doing nothing it appears.

He's won and good on him but for some reason I'm slightly annoyed by all that.

I think what you're missing is the following:

Mr Daniels is not controlled any more than any other contractor and could refuse to work on another site

It's the lack of D&C, essentially. While HMRC needs to evidence the presence of all three pillars of employment, the contractor only need evidence the absence of one.

You can argue about whether the lack of D&C was sufficient though.

Seems like a fairly borderline case, but most do!

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

**tarbera** · 26 March 2018, 21:22

Originally posted by northernladuk View Post

Well all that is a bit of a joke isn't it. Looks like it's time to re-write 18 years worth of IR35 guides cause he got away with a load of stuff that is key in many guides. If it's so easy to win an appeal with so many so called IR35 red flags then what's the point of even trying to stay outside?

If he can get away with that what is the point of IR35 insurance and professional representation? They are making money for doing nothing it appears.

He's won and good on him but for some reason I'm slightly annoyed by all that.

Whoohoo no more expensive IR35 insurance required then

**WordIsBond** · 26 March 2018, 21:26

Originally posted by northernladuk View Post

Well all that is a bit of a joke isn't it. Looks like it's time to re-write 18 years worth of IR35 guides cause he got away with a load of stuff that is key in many guides. If it's so easy to win an appeal with so many so called IR35 red flags then what's the point of even trying to stay outside?

Three pillars. MOO, Substitution, SDC.

The case failed on SDC, specifically on "how the work is done", which is typically described as the most important factor. They didn't control how the work was done.

The fact that there were other red flags doesn't change that. One of the key pillars didn't stand up, the case falls. He wasn't part and parcel.

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 think the guides have to be rewritten. If there is insufficient MOO to sustain a ruling of employment, insufficient SDC, or substitution, the case falls. The guides deal with how to protect against SDC and how to avoid becoming part and parcel, etc. Other than that, they deal with all the little details that can help tip the balance on close cases. This doesn't invalidate all that. There was insufficient SDC to justify a ruling of employment. Game over. There are a lot of other cases where there is a lot more supervision than there was in this case. When that happens, you better follow those guides, you are going to need every argument you can find on your side.

Edit: well, cross-posted with JB, if I'd seen his post I'd have saved the effort, covered the same bases.

IR35 appeal success