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IR35 case study: recent win for freelancer

Sally Howitt, an IT Consultant and director of AbFab Consultancy Ltd, is celebrating her IR35 victory after a case lasting for almost three years.

Her case began in November 2001 with an Employer Compliance Review which was initially handled by her accountant and passed to an IR35 expert firm in November 2002.

Sally said: "I felt that my case was going nowhere and that it was being pushed by the firm to go to a Commissioners hearing. I did not want this for a number of reasons. Firstly I have always been assured that I have a strong case, secondly I have seen several cases recently where the Revenue have won at the Commissioners and also I was looking at costs for representation at such a hearing of some £4,500".

Sally's investigation started with two contracts at stake up to 31 August 2001.

Although the contracts in themselves were clearly outside IR35 the Revenue chose to ignore them and go straight to the end client's to support a written opinion that IR35 applied and a request for some £40,000.

In April 2004 Sally's case turned from bad to worse when the Revenue asked for all subsequent contracts from August 2001 to April 2004 and advised that these too were to be subject to investigation under IR35.

Bauer & Cottrell were appointed in September 2004 and Kate Cottrell began discussions with the Inland Revenue. Written agreement that IR35 did not apply was obtained on 26 October 2004.

My message to anyone finding themselves in this situation is not to give in.

Sally Howitt - AbFab Consultancy Ltd

Sally said: "My message to anyone finding themselves in this situation is not to give in. I have always run a professional business and believed that I was outside IR35. It has been a very long, stressful hard slog but with the right advice my case is now won and I can put this behind me."

Source:Shout99

Published: Wednesday, 3 November 2004

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