IR35 – contract for services or of service?

W was the director of Jensal which provided IT services to private and public sector clients on a contract basis. Between May 2012 and April 2013 he provided business analyst services through Jensal for the Department for Work and Pensions (DWP). HMRC said had there been a direct contract between W and the DWP it would have been a contract of service rather than for services. Jensal was therefore liable to account for tax and National Insurance.

The taxpayer appealed.

The First-tier Tribunal said under the hypothetical contract between W and the DWP either party could terminate the agreement at any time. Further W’s services were for a specific project. There was no set location from which to work nor set hours. Payment was made on the basis of weekly timesheets. Expenses were paid but there was no holiday or sickness entitlement.

On mutuality of...