2018 is building up to be an important year of case law for IR35, with another win for the contractor in the case of Jensal Software Limited vs HMRC. 
The tribunal once again focused around control and Mutuality of Obligation (MOO) and saw IT contractor, Ian Wells defending his contractor status and saving an estimated £26,000 in tax and NI. 
 
The key details 
 
Mr Wells, an IT contractor, provided services via Jensal Software Limited. 
 
During 2012/13, being the period under enquiry, Jensal Software Limited was contracted to provide these services to the Department of Works and Pensions. 
 
Jensal Software Limited was presented at Tribunal by Qdos – experts in its field. 
 
HMRC’s case focused largely on Mutuality of Obligation, but Judge Jennifer Dean stated that “although there is mutuality of obligation it does not extend beyond the irreducible minimum, nor does it demonstrate that the relationship was one of a contract of employment”. 
 
Moving on to HMRC’s second line of attack, Judge Jennifer Dean went on to state that the “level of control falls far below the sufficient degree required to demonstrate a control of service”. 
 
The Tribunal also referred to Mr Wells contractual right to appoint a substitute as another indicator of business-like working. 
 
My thoughts 
 
Another fantastic and just result. The contract was clearly outside of IR35 and it remains baffling as to why HMRC pursued this case. 
 
The outcome also further compounds the issues with HMRC’s stance on MOO bringing into question whether HMRC will finally look to admit defeat and acknowledge CEST’s inaccuracies. 
 
Further reading: Case Notes here 
 
 
 
 
Written by: 
 
Nicola J O'Sullivan -  
Effective Accounting 
 
Founder | Xero Champion | IR35 Expert 
 
 
Tagged as: Case Law, IR35
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