Is IR35 Insurance worth it?
One of the greatest obstacles if you’re a contractor, recruiter or end client that engages with contractors, is dealing with…
Contractor Stuart Barnes (former professional rugby player and now rugby commentator) wins his IR35 case against HMRC. Mr Barnes was successful in his appeal on the basis of being ‘in business on his own account’ and won his IR35 case of £695k in tax. TC 08697.pdf (tribunals.gov.uk)
Ryan Dawson LLB (Hons), Cert CII, IR35 Project Manager at Kingsbridge said, “This is clearly another blow for HMRC in the list of ongoing IR35 cases but it should signal another huge win for the contingent workforce. I hope, as others will agree, this is a reminder to those businesses who needlessly blanket ban PSC’s that contractors can legitimately and compliantly be engaged outside IR35, without the need to utilise umbrella companies or payroll through fear of the tax risk.”
Ryan continued, “Whilst media cases can differ in their facts and circumstances to a ‘typical’ contractor, I believe there is an important message to Mr Barnes successful appeal. It was concluded in the hypothetical contract that based on the parties conduct and intention, the tribunal considered the contracts would not have been contracts of employment, thus upholding the appeal made by Mr Barnes.”
This result comes despite the tribunal finding that there was a sufficient framework of control over Mr Barnes in the performance of his services, and there being an obligation for Mr Barnes to perform the services personally. Some businesses operating OPR may find that concept slightly difficult to understand but it signals the importance yet again of thorough IR35 status determination to understand both the engagement and the wider context of how the PSC you engage operates.
Mr Barnes has won his appeal based on being ‘in business on his own account’ in large part down to sound management of his business and personality. Ryan concluded, “HMRC are actively conducting off-payroll compliance checks at the moment, but there should be no stigma attached to receiving a letter from HMRC. With the right guidance, process and accurate determinations, your position can be successfully defended.”
While we did not defend in this case, Kingsbridge has a team of IR35 experts that can help businesses and contractors going through compliance checks. Andy Vessey, our Head of Tax and industry leading IR35 expert, has successfully defended over 550+ contractors against HMRC IR35 enquiries and in 2018 he successfully represented Jensal Software Ltd at the First Tier Tax tribunal.
Kingsbridge is able to offer a range of IR35 solutions to support contractors and businesses alike, across all industries. The following links can help provide you with extra support and knowledge.
