IR35 - What Happens Next?

On 2 April 2001 Mr Justice Burton rejected the Professional Contractors Group case against IR35 (see Taxation 19 April 2001). The Professional Contractors Group an umbrella group of information technology contractors set up to fight the personal services legislation had argued that IR35 breached both European law and the Human Rights Act. Although the group lost the case the judge made some trenchant comments about the Inland Revenue's guidance on IR35 saying that it had not always been either clear or helpful

The main areas criticised concerned mutuality of obligation the 'in business on own account' test substitution penalties and the Revenue's approach to standard contracts. This article looks at these areas as well as recent guidance on subcontractors bonuses and cessation of trade.

Mutuality of obligation

In an employment contract there is a continuing obligation on...