Seeking taxman's help 'sparked IR35 probe'

An IT contractor might never have had to fight HM Revenue & Customs over his employment status if he had not volunteered his contract to its officials in the first place.



Reflecting on the Novasoft judgement, IR35 firm Bauer & Cottrell said Novak Brajkovic's use of the Revenue's contract service was the key that opened the case.



"It all started because the contract was sent to HMRC for review which demonstrates that this customer service by HMRC can turn into a full blown IR35 investigation.



"[Nonetheless this is ] a very welcome win," said the firm's co-founder Kate Cottrell, a former tax inspector, "but it is shocking that the case has gone on so long".



Yet she said Brajkovic's subsequent decision to ditch advice, or more specifically advisors, from the private sector held the contractor in good stead at appeal.



"He was no longer supported by previous advisers, and choosing to go on to represent himself at the tribunal effectively denied HMRC of the right to cross examine him."



Cottrell added that "Control - What, Where, When and How" was the deciding factor for the tribunal, which heard what its judge categorised as a "borderline" case of IR35.



"As with all cases, it all boiled down to whose evidence the tribunal preferred on the day and the reality of the working practices," the advisor said.



"Despite HMRC having the end-client on-side, the reality was that Mr Brajkovic had different rights to employees, and he exercised them."