IR35 Victory After Five Years

Despite the significant evidence of his business set up and the definite lack of control as to how he worked, the Contractor had been subject to HMRC’s gruelling fact-finding and questioning for five years – despite the fact the company had ceased trading with no way of paying the liability!

As with many IT contractors HMRC didn’t understand what the member was doing, how he worked, what the various projects were or how he interacted with the end client – yet they apparently knew enough to decide IR35 applied.

see “IR35-contractor-tax-demystified”

The previous advisers had been arguing with HMRC since the compliance visit in December 2004.  The case had seen delays in responding for up to five months from HMRC.

David Harmer of Accountax Consulting took over the case in January 2009.  In June 2009 the case went to independent review.  Accountax compiled a six page letter to the reviewing officer detailing precisely what the services were and how the company interacted with the main client, the fundamental HMRC failings in fact-finding and failure to apply the correct tests.  On the 12th August 2009, Accountax received a call from HMRC confirming they were dropping the case!

This case demonstrates the fundamental importance in arguing IR35 enquiries forcefully and applying the pressure on HMRC.  Over four years worth of distress and painstaking delays  neatly tidied up within 9 months, simply because the pressure was put on the inspector to reply to all points, on time.

Needless to say the Contractor in question is delighted the nightmare is finally over and can resume living his life.

“I can’t believe it’s all over after so long. I am absolutely convinced that the recent efforts from all in David Harmer’s team at Accountax made all the difference, and I’d like to extend a huge thanks to them.”