IR35 does not apply

A taxpayer IT contractor Miss R set herself up in business as a company ECR Consulting to prevent personal liability in case she were sued.

Among others she worked for VDS under various contracts some of which ran for a year; the average was around six months. She was not involved in organising the work. It was set up between ECR and Best an agency.

HMRC began a review of ECR’s records in 2005 and concluded thatIR35 legislation applied. ECR appealed.

The First-tier Tribunal decided that Miss R was employed under a contract for services although it accepted that this would not prevent the hypothetical contract between her and VDS being a contract of services. However for the following reasons the tribunal concluded that the hypothetical contract would have been one for...