Contractor wins case against IR35

The Inland Revenue's IR35 tax, which requires IT contractors to be treated as full-time employees for tax and national insurance...

The Inland Revenue's IR35 tax, which requires IT contractors to be treated as full-time employees for tax and national insurance purposes, was dealt a blow last week when the Special Commissioners for Tax ruled in favour of a freelancer at Ford.

The decision is one of a growing number of cases where courts have ruled against the Inland Revenue in disputes with contractors over the IR35 tax rules.

The Special Commissioners ruled that contractor Roger Tilbury was not an employee of Ford and should not be liable for IR35, following 28 months of legal arguments.

"I am delighted to have won and I am relieved it is over. It has taken more than two very stressful years to get to this point," said Tilbury after the verdict.

But Kevin Miller, head of the commercial department at law firm Tarlo Lyons, said that despite the ruling, employers could still come under pressure from rising contractor rates, once the economy improves.

If skills become scarce, employers could face pressure to change their standard contracts to offer contractors protection from IR35, he said.

Read more on IT for small and medium-sized enterprises (SME)

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