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| CURRENT SECTION :: IR35 / IR591 | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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A key IR35 case is set to make headlines next week – the first High Court hearing of an individual IR35 case since the legislation was enacted. The hearing is set to take place for one day next week (week beginning 24th Feb), although we will only be informed of the precise hearing date on the afternoon beforehand. The Professional Contractors Group, which has backed this case using their legal fund, will be out in force to cover the case, and we’ll be working with them to provide updates on Contractor UK throughout the process to non-PCG members. Here is a brief summary of the case: Gordon, a former police officer turned IT contractor from Sunderland, formed Synaptek Limited in 1990 and has provided his services to over 20 clients, often simultaneously over the past ten years. He has also employed up to four staff members. In early 2000, Stutchbury was working for three clients. When he submitted all three contracts to the Inland Revenue, two were found to be outside IR35, and in the other he was found to be a “disguised employee” of EDS (in an IR35 sense). Stutchbury was providing his services to the Benefits Agency in Longbenton, via EDS, in the “caught” contract. Although Stutchbury paid all the tax demanded, he also appealed to the General Commissioners, preparing the case and representing his Company, Synaptek Limited, himself! The outstanding feature of this case is that the General Commissioners found Stutchbury to be "in business on his own account", yet upheld the Revenue's decision that he was subject to IR35. This decision contrasts starkly with assurances given by he Government that “Genuine businesses are not affected by IR35” Stutchbury’s company would have been unable to meet the cost of taking the case to the High Court without the financial backing of the PCG’s legal fund, which is being used to fund some crucial member cases against IR35. The decision to concentrate on the case law strategy to defeat the legislation came after unsuccessful attempts by the PCG to have IR35 overturned at judicial review. This hearing is a significant milestone in the battle for contractor companies to receive fair tax treatment. It has taken over two years from the initial Inland Revenue opinion to reach the High Court – a ruling may not be made for several weeks after the hearing. The PCG tell us that Synaptek’s counsel will argue that the case should be referred back to the Commissioners for further findings of fact before the High Court takes a view. Check back for updates on Contractor UK next week! Feb 20, 2003 Email this article Printer friendly page Previous Page
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