5 years after HMRC appealed an IR35 case defeat carrying £243,324 in tax legal responsibility, judges have instructed this long-running saga to be reheard regardless of the work having taken place 14 years in the past.

IR35 specialist, Qdos, stated the state of affairs “smacks of unfairness” and highlights the “nuances and complexities of the IR35 laws”.

In 2019, IT contractor, Richard Alcock, efficiently appealed HMRC’s view that he belonged inside IR35 when contracting through his restricted firm (RALC Consulting Ltd) for Accenture and the Division for Work and Pensions, between 2010 and 2015. The tax legal responsibility in query amounted to £243,324, earlier than curiosity and attainable penalties.

The case hinged on Mr Alcock being considered as in enterprise on his personal account, along with Mutuality of Obligation (MoO) not being current and his shoppers not controlling the working relationship in a way that mirrored employment. Nevertheless, HMRC appealed this verdict, largely on the grounds that the First Tier Tribunal didn’t take into account the truth of how the providers had been supplied by Alcock, in distinction to the contract itself.

5 years on, this attraction has been granted. Consequently, the Higher Tier Tribunal listening to, held in December 2023, instructed for the case to be reheard – that is regardless of RALC Consulting Ltd having stopped buying and selling.

Qdos CEO, Seb Maley, commented:“This smacks of unfairness. 5 years on from having efficiently gained this case and fourteen years because the work was carried out, this contractor faces the prospect of being dragged by the tribunal system as soon as extra.

“Not for the primary time, the nuances and complexities of the IR35 laws run so deep that Judges can’t appear to interpret it. However as is the case far too usually, it’s contractors who pay the worth.

“This contractor particularly, whose enterprise not trades, is anticipated to move again to courtroom and show his innocence once more – all whereas having a tax invoice of properly over £200,000 hanging over him for the foreseeable future.”