UK Court's Decision On IR35 Case ‘Offends Common Sense’ Says PCG

by Robert Lee, Tax-News.com, London

15 October 2004

The recent decision by the High Court, rejecting an appeal by a small business owner in an IR35 case has been condemned by the Professional Contractors Group as “offensive to common sense”.

The case in question centred on an appeal by oil rig designer William Hood’s company, Usetech Limited, regarding an earlier decision by a special commissioner that previous earnings were subject to IR35 legislation.

However, as the PGC explained, in this case, Mr Hood had negotiated his contract for services with an agency, but for reasons of commercial confidentiality, had not seen the 'upper contract' between the agency and the end client.

"Once again we witness the lottery of running a small business,” remarked PCG chairman Simon Juden.

"The size of his tax bill was found to be dependent on a document that he had neither signed nor seen. This surely offends common sense," he added.

The PCG, established to fight the corner of the UK freelancer and small business person, called for urgent clarification of the tax position for small firms, especially in light of the recent split decision by a panel of special commissioners relating to Section 660 legislation.

"Yet again, confusion reigns for small businesses,” Mr Juden announced, continuing:

"It is extremely unfair and unreasonable that people who choose to run their own businesses should have to face constant uncertainty about where they stand in relation to their tax.”

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