Revenue wins IR35 Commissioners' case

The Inland Revenue has won at the Special Commissioners in an IR35 case. The case involving former freelancer Bill Hood and his company, UseTech, has been a high profile issue, as it was supported by the Professional Contractors Group.

The public interest was raised further following publicity that the Special Commissioners case was unusually being held at Mr Hood's home in Gateshead rather than London due to his ill health. Freelancers have been watching and waiting for the result with interest.

Mr Hood, a former oil-rig design engineer, was represented by Dave Smith from Accountax. The dispute has been going on for two and a half years in total after it started with a routine Revenue review.

At the time of the Special Commissioners hearing in January 2004, it was reported that if he lost the case, he could face a £50,000 tax bill and could lose his home.

No specific details have been released by the PCG yet, but there are unconfirmed reports that substitution was a factor. Freelancers, small businesses and their advisors will be waiting to see what the wider implications are.

A PCG director said: "This result is extremely disappointing and we are considering an appeal, pending clarification about certain issues which were not clear from the judgment."