It is the Revenue's guidance, not the law, that the ruling undermines

'Workers affected by IR35' - that's where the difference of opinion will lie.

The point that you don't seem to be aware of is that the Inland Revenue guidance on whether a contractor is an employee of the client was subject to considerable criticism by the Judge in the Judicial Review judgement.

eg. the judge stated that 'There must be a minimum of mutual obligation'. This is contrary to the Inland Revenue guidance which doesn't contain any reference to mutual obligation, whilst their internal manual instructs inspectors to avoid the issue unless they are confronted on it.

He made several other observations on things that the Inland Revenue must take into account, or which must be treated differently than is stated in the current guidance.

It is not the 'law of the land' that is in question. It is the application of the law. It seems to my mind that the Inland Revenue have got it wrong, and the guidance published is incorrect.

You are confusing the 'law of the land' with what might be regarded as the Inland Revenue's inaccurate and simplistic interpretation of it.

In this light, contractors have to decide whether they are in business on their own account, irrespective of what the Inland Revenue guidance says.

The Inland Revenue's decision is not final. Anyone can challenge and let the courts decide.

This is why some contractors are responding positively to the outcome.

They honestly believe that they are in business on their own account, and that the judge's statements add further weight to this view and that the Inland Revenue haven't got a leg to stand on. And even if the contractors are wrong and the Inland Revenue subsequently prove that they are wrong, any justification for applying penalties is significantly weakened.

I imagine that many contractors who believe they are in business on their own account will now stick with their own convictions, retain profits in their companies to allow for the possibility that they are wrong (and to cover possible legal fees) and wait to see if the Inland Revenue contest.

Another statement made by the judge suggests that if contractors are IR35 'caught' it is likely that they are employees of the customer. That has further implications, which might cause IR35 to be very unpopular on a much wider scale.

It's a complete dog's dinner and it's obvious that tax revenue will be lost, not gained, because of IR35. If the government have any sense at all, they'll be seriously considering how and whether this poorly targeted legislation is to be applied by the Inland Revenue and will be taking action to ensure that this situation doesn't get out of hand.

I suspect that things will go strangely quiet now, at least until after the general election.

But the judgement isn't the end of this story - it's just the end of the first chapter.