The Inland Revenue has decided to withdraw from its IR35 case against Ian Buckley, member of the Professional Contractors Group (PCG) and director of Fortissimo Software Ltd, based in Warrington. After 20 months of wrangling, it wrote to Accountax on 2 December 2003 advising that, ìAfter further consideration of your clientís appeal ÖÖ it has been decided not to proceed with the case before the Special Commissioners.î No reasons were given for reversing its previous decision.
PCG had agreed to support the case, which was assigned to Accountax in August this year. At the end of November, the Revenue indicated that it would continue to pursue its case vigorously, declining to comment in response to points made by Accountax, and stating in a letter that it did ìnot think it appropriate at the moment.î Accountax had the case laid down for a hearing at the Special Commissioners, had managed to agree directions, and was awaiting a final date for the hearing.
Commenting upon the decision, Dave Smith of Accountax said, ìOnce again, the Revenue jumped to conclusions to the detriment of the taxpayer, and only at the threat of a hearing at the Special Commissioners did they review the case and reconsider their stance. This is the sixth IR35 or status dispute that we have won in just three weeks. So far, we have taken on some 500 tax status cases, and won all but two. This seems to be a war of attrition, and our advice to freelancers in a similar situation is not to accept the preconceived notion that IR35 automatically applies.î
Ian Buckley was happy to have the case resolved after 20 months of worry. ìI started the ball rolling,î he admitted, ìby submitting the contract in question to the Revenue for their opinion. I just wanted to know where I stood, having read about IR35. Without PCGís support, I would not have been able to afford expert representation, and would have been fobbed off.î
PCG chairman Simon Griffiths was pleased with the outcome, despite the Revenueís failure to explain its decisions. ìThis also highlights our advice to PCG members,î he said, ìnot to submit their contracts to the Inland Revenue, under any circumstances, for its opinion. Not only is this likely to result in an investigation if you disagree with the verdict, but it will also mean being declined cover under your Tax Investigation Insurance policy.î
PCG is supporting a further four IR35 cases and has agreed to support Geoff and Diana Jones of Arctic Systems in their Section 660A case at the Special Commissioners in the New Year.
Inland revenue withdraw IR35 case
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