Another IR35 victory over the Revenue
Lawspeed have helped another freelancer to beat off a Revenue challenge to his IR35 status. While not unusual in itself the example is interesting because the freelancer concerned was working under very similar conditions to Gordon Stutchbury of Synaptek.
UKTECH readers will recall that Synaptek lost the very first IR35 case to reach the High Court, when the High Court rejected its appeal in March 2003 against the earlier decision of the General Commissioners that Stutchbury was the disguised employee of EDS, who were supplying his services to a Government department. See here for details:
Synaptek
In this case a freelancer, with the support of Lawspeed, has forced the Revenue to back down before getting as far as the Commissioners on their claim that he was caught by IR35, despite the fact that the freelancer worked via the same agency as did Gordon Stutchbury, using the same contract and working for a similar Government department.
In my view this example serves to confirm what many experts felt at the time - that the Synaptek case, while grossly unfair on Mr Stutchbury - was not the best one to use as the first High Court appeal.
Gordon Stutchbury had represented himself at the Commissioners and there were very limited grounds available to the High Court to enable it to overturn the verdict reached by the Commissioners on the basis of the facts that they had established. It's a shame in a way that this case did not get as far as the Special Commissioners as we would then have some published guidance as to the reasoning and factors that lead to this different view from that reached in Synaptek.
Nevertheless, this latest example emphasises the value of having expert representation at the earliest stages. Such examples are not rare. Qdos Consulting, who are the advisers to the tax expense insurers of UKTECH's Freelancers Outside IR35 system (FO35), have handled some 173 IR35 challenges under this and other tax expense policies. To date they have won all but one case.
This, more than anything, illustrates the fact that freelancers, who operate as a business, who follow a sound business approach, who document their business characteristics and who are well briefed on tax status issues and are backed by appropriate professional support have little to fear from IR35.