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 members 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 members 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 contractors 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 clients site, using the clients
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 Redstons help PCG is assessing whether the Group
should assist the member in appealing the Commissioners
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 Redstons 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
Commissioners 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 Redstons 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 Counsels
opinion before making a decision.
Unfortunately, as the case stemmed from the voluntary submission
of contracts to the Revenues contract review service, and
not from a Revenue investigation or assessment, then the
case is not covered by the PCGs 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)
- - - - - - - - - - - - - - - -
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 years 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
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at https://www.pcgroup.org.uk/members/discussion_forum.html
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