PCG Newsletter - 3 Feb 2002 - 06/02 - Special Commissioners case

In this issue:

• Special Commissioners case and appeal possibility
• Re-opening of PCG legal fund
• Roadshow for PCG ‘Toolkit’ seminar
• PCG login and your registered details
• Real Life Meetings

1. Special Commissioners case and appeal possibility

A second contractor has had their appeal against their status under IR35 turned down by Special Commissioner, Nuala Brice. Unlike the earlier “Battersby” case, which was reported last year, this contractor was represented by Counsel in front of the Special Commissioner.
(see https://www.pcgroup.org.uk/members/appeals_and_tribunals.html )

The case – referred to as “Frank Simpson and FS Consulting Limited” in the anonymised judgement – involved a PCG member and has been discussed on the PCG forums. Although PCG was not involved with the member’s case when it went to the Special Commissioner, PCG has arranged for leading tax expert Anne Redston to review the judgement and the case materials.

She noted that the member’s defence at the Commissioners appears to have centred largely on the issue of whether the agency rules applied to the worker, on the basis that if they did *not*, then the worker could not be caught under IR35. This was a novel argument but the Commissioner concluded that both sets of rules were in force and the fact that he was not caught by the agency rules did not mean he was outside IR35.

Unfortunately, however, the contractor’s case (as set out in the ‘skeleton arguments’ which summarise the main points to be made at the Commissioners) made little mention of the usual status tests and concentrated on the agency argument. Hence factors that the Revenue raised and which case law suggests are not necessarily indicators of employment - such as working at the client’s site, using the client’s equipment, being paid by the hour or having little risk apart from invoicing - appear to have been largely unanswered in front of the Commissioner.

With Anne Redston’s help PCG is assessing whether the Group should assist the member in appealing the Commissioner’s decision. Anne Redston has noted that, on the key issue of mutuality of obligation, the position is not strong. It appears from the background evidence that even if the contracted work had been completed ahead of schedule the client would have been obliged to provide additional work and the worker would have been required to carry it out until the contract ended – a key aspect of mutuality.

In addition the substitution clause was based upon the contractor having to use a substitute who had previously worked for the client. In Anne Redston’s opinion “It is arguable that the substitution clause should have been given greater weight. But there is no precedent case where exactly this sort of substitution has been considered, and a higher court will not overturn a decision which, on the facts, is within ‘the band of possible reasonable decisions’. If appealed, the High Court may therefore not consider the Commissioner’s approach to the substitution clause to be an error of law.”

Hence, while it appears that there are some issues that were not fully explored, it is less certain that there are good grounds for appealing the case to a higher Court. However, with Anne Redston’s help PCG has agreed to consult with a leading employment Counsel to see whether there are good grounds for appealing.

The PCG Board are keen to assist the member if there seems to be good grounds for an appeal on issues that were pertinent to most PCG members. However, because the case was heard at the Special Commissioners, it does not as yet set any precedents and if appealed the PCG would need to be certain that the appeal would be successful as a judgement in a higher court would set a precedent. PCG was aware that some elements of this case are fairly unique to the member and an appeal may not go far in clarifying issues of wider relevance to the contractor community – which is the primary aim of the case law strategy. Nevertheless PCG will await Counsel’s opinion before making a decision.

Unfortunately, as the case stemmed from the voluntary submission of contracts to the Revenue’s contract review service, and not from a Revenue investigation or assessment, then the case is not covered by the PCG’s tax investigation insurance. If the member had decided to treat himself as outside IR35 based upon his own well documented assessment of the relevant factors and the Revenue challenge had come after a PAYE audit then the case would have been eligible for the PCG insurance.

2. Re-opening of PCG legal fund

Following the call for funds at the start of this year, PCG will continue the legal fight against IR35 by means of the case law strategy. PCG is looking to establish case law relevant to modern working practices which will move members outside IR35 with certainty.
https://www.pcgroup.org.uk/members/resources/case_law_briefing.pdf

The legal fund is now re-opened for online credit card payments to support the case law initiative: https://www.pcgroup.org.uk/members/legal/legalpledge.html

Please also use this link to meet you pledge payment, and to pay by cheque or bank transfer.

NB - - - - - - - - - - - - -
If you need a reminder of your PCG username and/or password to contribute see below (4)
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3. Roadshow for PCG ‘Toolkit’ seminar

After the success of the recent ‘IR35 Toolkit Seminar’ in London, PCG is pleased to announce additional dates and venues. The seminar brings together key speakers on the issue and will help members decide status in advance of this year’s P35 form. The new dates are:

5 March 2002 Heathrow; Renaissance Heathrow Hotel
7 March 2002 Bristol; Holiday Inn
1 May 2002 Aberdeen; Britannia Hotel
2 May 2002 Edinburgh; Caledonian Hilton Hotel;
3 May 2002 Manchester; Renaissance Manchester Hotel

PCG members can book at the discounted rate of £72 (+ £12 Vat = £85 total) https://www.pcgroup.org.uk/resources/seminar_02_02.html

4. PCG login and registered details

If you need a reminder of your PCG username and password, see the information in this guide: https://www.pcgroup.org.uk/troubleshoot.html

Use this form to contact the office for further help:
https://www.pcgroup.org.uk/scripts/public/contact/form.pl

PCG holds a record of your email and postal address. In the run up to P35 form completion, it is important that we are able to reach you by email and post. Please make sure your details are correct. You can check what details we hold for you and make any necessary amendments from this link: https://www.pcgroup.org.uk/scripts/members/profile/editme.cgi

REGIONAL NEWS
Real Life Meetings

For the latest information and to start a local group see https://www.pcgroup.org.uk/threads/wwwthreads.pl?a=l&f;=meet

To promote your local meet through the newsletter – email [email protected] with REGIONS in the subject matter, details of the event and a name and email contact point/or phone number for further information.

Basingstoke
***********
Tuesday 5th February
Hogs Head (plus curry afterwards)
Time: from 7:30

Aberdeen
***********
Tuesday 5th February
Inn at the Park, Polmuir Road, Aberdeen
Time: 6pm

Central London
* * * * * * *
Wednesday 6th February
Venue: The Cheshire Cheese, 5 Little Essex Street, WC2. Nearest Tube Temple.
Time: 6.30 - 7pm

West Midlands
* * * * * * *
Thursday 7th February
Venue: Rose and Crown (Junction 3, M42)
Time: from 7pm

Yorkshire
* * * * * * *
Friday 8th February
Venue: Cedar Court (formerly Hilton) Hotel, Halifax (just off M62 J24)
Time: 7.30pm

Bristol
***********
A meeting / meal is being organised in Bristol on Saturday 9th February.
Please email [email protected] or for details.

Farnborough
***********
Wednesday 20th February Prince of Wales
Time: from 7:30

Wokingham
***********
Thursday 28th February The Ship
Time: from 7:30

Please follow this link to Real Life meetings to get involved https://www.pcgroup.org.uk/threads/wwwthreads.pl?a=l&f;=meet

Mark Roderick
(PCG Executive Team)

This newsletter is published by the Professional Contractors Group. Please feel free to circulate the newsletter to other independent contractors who you know, and who may be interested in joining the PCG. Some links in the newsletter will take you into the password-protected members' area of the PCG website. If you have forgotten your password, contact https://www.pcgroup.org.uk/scripts/public/access/form.pl

To view the Forum links in this newsletter, you must be first logged into the Forum. Further details available at https://www.pcgroup.org.uk/members/discussion_forum.html