The High Court has ruled against an IT consultant who was
fighting a £99,000 tax demand for work he completed on behalf of
motoring organisation the AA.
The Professional
Contractors Group (PCG), which represents UK IT freelancers,
has expressed its shock at the judgement, which it said could have
major
implications for other consultants.
The
"Dragonfly" IR35 case involved PCG member Jon Bessell, the
owner of Dragonfly Consultancy. He is now liable for £99,000 in
tax.
Speaking after the judgment was delivered, he said, "I am
devastated by today's news. Not only does it affect my family and
me, but all the other freelance professional consultants who are
trying to earn an honest living.
"I was never an employee of the AA and I simply cannot
understand how the High Court has reached its decision. It is a
travesty of justice."
The judgement found that Bessell was technically an employee of
the AA when completing IT projects for the organisation, and that
he was therefore liable for the £99,000 tax demand.
The Professional Contractors Group supported Bessell in bringing
his appeal because of the potential wider implications of the
case.
PCG managing director John Brazier said, "This is a potentially
massive blow to freelancers throughout the country. This case
threatens the long-established defences against IR35.
"We will be looking at the judgment in very close detail to work
out its full implications."
The Professional Contractors Group will be publishing further
guidance on the consequences of the judgment shortly, he said.
IR35 at a glance >>