Client’s services were provided as an employee

The taxpayer NLS was the personal service company of Mr L. Since its incorporation in 2008 NLS has engaged with Nationwide to provide Mr L’s project management services. It has also contracted with other intermediaries to provide his services to the building society. Mr L said that ‘in practice’ he was on Nationwide premises ‘almost continuously’. 

The issue was whether Mr L should be treated as an employee of Nationwide for the purpose of the IR35 rules. HMRC said he should. The taxpayer appealed.

The First-tier Tribunal concluded the relationship between Mr L and Nationwide was one of employment. There was mutuality of obligation within each contract although there was no obligation on either side to extend or renew. However Mr L has worked for Nationwide for many years full-time with only a few gaps.

On control during a contract Nationwide had the right to...