IR35 does not apply

First Word Software Ltd the appellant company was established by A to provide computer consultancy services to clients.

In 2000 P agreed with the appellant that P would make payments to the company and that it would provide specified services to R. A led the project on behalf of the appellant.

HMRC said that had the agreement been made between A and R A would have been regarded as an employee of R. Thus the company as an intermediary should pay National Insurance and PAYE in respect of payments made to A.

The company appealed.

Finding for the appellant the Special Commissioner found that on the evidence with regard to the extent that R controlled A's work he was engaged to provide a 'small piece of a large jig-saw' and it was left to him how to perform his work.

He...