| Landmark ruling indicates HMRC crackdown on employee/contractor confusion |
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Press release: October 2008 The line between who is a contractor - and who is not - was reviewed in a landmark ruling in the High Court recently. An appeal, lodged by Dragonfly Consultancy Ltd, was overturned. According to Stuart Sheldrick, a tax adviser and director of LB Group, this clearly signals that HM Revenue & Customs is cracking down what it deems "employees" with consultant status. Stuart explained that IR35 is a complex piece of legislation, which frequently leads to confusion. "It sets out to clarify the situation for contractors working for just one customer. In the case of Dragonfly Consultancy Limited, it highlighted the fact, on the one hand, that the contractor had control over Mr Bessell´s working hours and he was unable to provide substitution. So whilst that indicated that he was an employee, the defence claimed that he provided his own equipment, did not receive sick pay and did work for another client. The High Court felt that these were comparatively weak arguments and ruled in favour of HMRC. "This is a very difficult area of the law, which really needs to be looked at by tax specialists on a case by case basis. Only then can employers – and contractors – be sure that they are staying the right side of the law," he added. For more information, please contact Stuart Sheldrick at LB Group on 01245 254780 or stuart.sheldrick@lbgroupltd.com EDITORS NOTE
Contact: Stuart Sheldrick at LB Group, 129 New London Road, Chelmsford, Or Chris Annis, LB Group, 82 East Hill, Colchester, CO1 2QW. Tel: 01206 867551. Email: chris.annis@lbgroupltd.com
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