IR35: ‘Dr Mantides’ must wake up the NHS, make the private sector stand up

It’s extremely pleasing to note the judgement in George Mantides Ltd V HMRC, writes Dr Iain Campbell, director-general of the Independent Health Professionals Association, because it serves to underline the points which we have repeatedly made to NHS trusts, and forced NHS Improvement to concede via an exchange of Judicial Review Pre-Action letters.

And that point is this: that all contracts for services must be assessed individually on their full material facts and, in turn, that blanket assumptions stating all workers will be caught by IR35 are incorrect and will lead to widespread injustice.

The downright exploitative

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 the IR35 legislation. The Mantides judgment underlines our view that universal assessments deeming every contractor caught by IR35 /the Off-Payroll rules, are unjust and represent a downright exploitative, treatment of many genuinely self-employed individuals.

When trying to achieve a true understanding of IR35 status, one must have regard for the full factual matrix -- not half of the facts as HMRC seems eager to encourage via ‘role-based’ blanket assessments.

Eight in 10 times in favour of the taxpayer

Of the five times courts have now considered the employment status of doctors, both at employment tribunals and tax tribunals, the verdict has, for 80% of the engagements considered, shown the doctor to be genuinely self-employed. This has even included the case of a junior doctor assisting in surgery -- likely among the highest levels of control to which a health worker is ever likely to find themselves subjected.

But with regard to the case decided against Dr Mantides (his ‘RBH’ contract), it is unfortunate to see that the NHS trust in question did not even attend to give evidence and that, 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. While we do not know the individual circumstances of the engagement any more than the judge would have done, and respect how difficult coming to such a conclusion with such a paucity of information must be, we do feel that the terms of the notional contract used in reaching this judgment do appear atypical. Indeed, they look quite unorthodox to those of us with experience in the locum health worker market, where 1 to 4-hour notice periods are often the norm and there is almost invariably no guarantee of continuing work or minimum hours. We do wonder whether a different verdict might have been reached, had the hospital provided members of medical staffing to be cross-examined, or copies of contracts used.

Bamboozling, wrongful and the worst-of-all worlds

The key point over termination here does once again underline the importance of whether an irreducible minimum of Mutuality of Obligation is present. As has been known for some time now, HMRC attempted to bamboozle NHS trusts into ignoring this test by erroneously citing the contract law definition of Mutuality in employment law contexts -- something which could potentially confuse HR and Medical personnel not well versed in the caselaw. The Revenue has, additionally, wrongly omitted this test from CEST -- on the same flawed reasoning.

But now for a more positive point. We note that Dr Mantides has done a commendable job of representing himself and, indeed, secured a crucial victory in one of his cases. We hope this judgment will ring alarm bells about what has been done to workers throughout the NHS and health recruitment sector since April 2017, as it is a serious injustice. And the verdict should go some way towards warning the private sector of the urgent need to oppose rollout of these disastrous reforms into the beating heart of the gig-economy, before hirers find themselves struggling to recruit contractors, and before contractors experience being forced into ‘false employment,’ yet without basic workers’ rights in an exploitative, worst-of-all-worlds situation

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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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