Locum doctor's IR35 half-victory ‘should come with a health warning’

Substitution and Mutuality are the few strong factors in an IR35 half-victory for a locum urologist at two NHS hospitals, but the partial win 'should come with a health warning.'

Bauer & Cottrell issued this alert yesterday because while the medical sector will cheer the locum, George Mantides, for partly beating IR35, his case does not create case law precedent. 

In fact, the case of George Mantides Ltd (GML) Vs HMRC can only potentially “have influence” -- at most, because it was heard at the First Tier Tribunal, the IR35 advisory observes.

It shows some highly atypical features too, such as Dr Mantides representing himself and, also at the tribunal, a no-show by one of the two engagers --  Royal Berkshire Hospital (RBH).


Eventually ruled to be where Mantides fell ‘inside IR35,’ the RBH not attending (the representative did not recall the gig), cannot have helped, given that client evidence has clout.

The Independent Health Professionals Association (IHPA) said: “It is unfortunate to see that the NHS Trust in question did not even attend to give evidence.

“Given a lack of such testimony, and indeed of a physical contract, the judge had no option but to make assumptions regarding what the terms of the notional contract might have been.”

'Less weight'

Due to the no-show, tribunal judge Charles Hellier said “less weight” was given to statements which RBH provided, but which were left with him. Yet this dealt another blow to Mantides.

“We are not privy to all the information put to the tribunal,” says Bauer & Cottrell co-founder Kate Cottrell.

“But the judge is, and he [therefore] felt able to make certain assumptions such as over the notice period…[as] he also had sight of the complete written contract.”

'Not an employment pointer'

In trying to split Mantides’ work at RBH from ‘MMH’ -- Medway Maritime Hospital, where IR35 did not apply on his just 5-week contract, notice period played an unusually big part.

Specifically, at least one week’s notice was required at RBH, compared to just a single day’s notice at MMH – a very brief termination period which “does not point to employment.”

Two other “material” differences between Mantides’ work at RBH (inside IR35) and MMH (outside IR35) should be observed, the tribunal’s judgment adds.

'Step into his shoes'

At RBH, the urologist had “no right to provide another person to step into his shoes,” judge Hellier found, whereas at MMH, the locum ‘could send an agency-approved substitute.’

Although the latter clause was not acted upon, “it could have been exercised and taken effect”, said the judge, deeming it a “relevant pointer away from employment.”

Thirdly, referring to Mutuality of Obligation, the judge said: “The notional contract with MMH would have contained no obligation on MMH to try to provide either 37½ hours or 10 half day sessions in a week.

'Duty to provide'

“There would not have been even a qualified obligation to provide work. That points away from employment.”

RBH also specified those 10 half-day sessions in a week, but unlike MMH, the RBH “would have been under a duty to use reasonable endeavours to provide those sessions during the period of the contract.”

Employment law firm Chartergates said: “There were many similarities between [Dr Mantides’] two arrangements when it came to Control and other factors, both of which were considered neutral or only weakly indicative of status [and] not sufficient to satisfy the FTT to support employment or self-employment.

“Instead, the FTT were able to identify material differences between each engagement, namely, to do with Personal Service and Mutuality of Obligations. It was these material differences which set the arrangements apart.”

'Commendable job'

Dr Iain Campbell, the IHPA’s general secretary said NHS trusts still needed reminding that “all contracts must be assessed individually on their full material facts.”

“We have always cautioned our members that, while we believe the majority of contracts would, if fairly assessed, fall outside IR35, it is likely that a minority of contracts would fall inside IR35

“We note that Dr Mantides has done a commendable job of representing himself and, indeed, secured a crucial victory in one of his cases.”


Offering her congratulations, Ms Cottrell, a former tax inspector said: “Well done Dr Mantides for representing yourself. But [to other] locums in the field, please read the health warning.

“Firstly each case turns on its own merits. Secondly, we are not privy to all the information put to the tribunal and thirdly, rumour has it that an appeal is being considered by HMRC.”

A spokesman for HMRC said it was “disappointed” with the tribunal’s decision for Dr Mantides’ MMH contract, saying: “HMRC will carefully consider the outcome of the tribunal before deciding whether to appeal.”

The Revenue spokesman also said: “HMRC welcomes the judgement that Dr Mantides was within the intermediary rules when he worked for the Royal Berkshire Hospital.

“It is right that an individual who works through a company, but would have been an employee if they were taken on directly, pays broadly the same amount of tax and National Insurance contributions as employees.”

'If they cannot agree'

As the sole director of GML, Dr Mantides was appealing an HMRC bill under IR35 of £29,600, relating to his work at MMH between September and October 2013, and at RBH, between March and August 2013.

Judge Hellier said: “I allow the appeal in relation to the work at MMH and dismiss it in relation to the work at RBH.

“The appeal is formally adjourned to permit the parties to agree the figures. Each has leave to ask for a hearing to deal with the calculations if they cannot be agree.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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