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Dragonfly ruling means HMRC calling the shots on IR35 and contractor status

With the smoke still clearing after the recent failure of Dragonfly Consulting’s and Jonathan Bessell’s IR35 appeal in the High Court, a shocked contracting sector is starting to take stock of the implications of the ruling.

One thing already appears clear, though: until the case law of the Dragonfly appeal has been tested, contractors should be aware that under almost any circumstances HMRC can now call the shots on who is within and outside IR35.

Lessons learned

There is considerable doubt, following the ruling by the Honourable Mr Justice Henderson, that the rights of contractors and freelance professionals will ever be the same again. The decision may have paved the way for a watershed in how highly skilled flexible professionals work.

However, contractors have proved to be resilient in the face of adversity, as highlighted by ContractorCalculator’s recent survey of contractors’ opinions on their prospects during the current credit crunch.

Further analysis of the Dragonfly Consulting High Court ruling will be reported on ContractorCalculator as the implications become clearer.

Published: 08 September 2008

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