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IR35 victory for Primary Path Ltd against HMRC

Contractor Phil Winfield has won his IR35 battle against HMRC. Eight years after the taxman started its investigation into his company, Primary Path Ltd, a first tier tax tribunal has found Primary Path to be genuinely in business of its own account.

According to PCG, which has supported Winfield throughout, a key factor of the ruling was “the presence of what could be described as a pay-as-you-go relationship” between Winfield and his client, pharmaceuticals giant GSK. It was partly because he was paid by the hour, in the same way many professional service firms bill clients, that led the tribunal to rule that Winfield’s relationship with GSK was “one of an independent and self-employed contractor and not that of employer and employee.”

Primary Path’s IR35 victory over HMRC is the third in a run of tribunal losses for the taxman. In another ruling, Elaine Richardson’s ECR Consulting was found to be a genuine business, partly because the contractor was paid a day rate.

And contractor Gary Hughes won his IR35 case against HMRC after a Birmingham tax tribunal ruled that, “there is no mutuality of obligation and the degree of control which would have been needed to establish a contract of employment just did not exist.”

PCG Managing Director John Brazier vowed to maintain pressure on HMRC to stop it from incorrectly targeting genuine contractors: “We are still fighting IR35 on all fronts to defend our members. This means meeting HMRC both in the courts to defend individual cases and at policy level in the IR35 Forum to stop these misapplied cases happening in future.”

Winfield, who slammed HMRC for wasting public money by dragging out the investigation, is grateful that the tax investigation insurance provided as part of his PCG membership meant that Accountax could represent him at the tribunal.

“It has been a trying time and I would not have had a hope in continuing the defence without the support of PCG…and…Accountax,” says Winfield, who points out his costs alone would have been more than £50,000.

Published: 12 July 2011

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