The 23rd IR35 court case to date, and second in just two months, saw a win for the contractor Mark Daniels of MDCM Limited. With many similar characteristics to the recent Ackroyd case, yet a different verdict, this decision by the Tribunal has caused further confusion across the industry. 
This case highlights once again the uncertainty and scale by which IR35 is open to interpretation. 
 
The keys details 
 
Mark Daniels worked in the construction industry. 
 
Mr Daniels had set-up a limited company – MDCM Limited, for the purpose of providing management services to clients in this sector. 
The case under review refers back to 2012-14 when MDCM Limited held a contract with an intermediary (agent) Solutions Recruitment Limited to provide these services to Structure Tone Limited (STL). 
 
As with the Ackroyd case, control was a major factor in this case. HMRC argued that Mr Daniels was subject to a significant degree of control – but this was successfully disputed with Tribunal Judge Ian Hyde concluding that “STL did not exercise any more control on the site than they would over an independent contractor”. 
 
In addition to this, the Tribunal determined that:- 
 
Mr Daniels was not integrated into the STL business (demonstrating that he was not part and parcel) 
 
He was required to pay his own expenses (an indicator of business-like trading and financial risk 
 
There was no requirement for either party to give notice to terminate the contract. 
 
A further intriguing aspect to this case, is that it is the first in history where the contractor won despite having no right to substitute. This is a substantial development or perhaps oversight by the Tribunal? This perhaps leaves the door open for appeal by HMRC. 
 
My thoughts 
 
Although no doubt a triumph for contractors across the country, giving cause for some level of hope, many will be left more bewildered than ever! 
 
As Andy Chamberlain, of the Association of Independent Professionals and the Self-Employed (IPSE), commented, this decision “…just adds further proof that the IR35 rules are too complex and difficult to apply with any certainty”. 
 
 
 
 
 
Written by: 
 
Nicola J O'Sullivan -  
Effective Accounting 
 
Founder | Xero Champion | IR35 Expert 
 
 
Tagged as: Case Law, IR35
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