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IR35 Court Cases: History of all cases and references to judgments

Interested in the IR35 court cases? We list every single one here.

The Intermediaries Legislation is Chapter 8 of ITEPA, enacted in April 2000. This is commonly referred to as “IR35”, but confusingly “IR35 status” is also used to refer to whether someone is considered a “deemed employee” based on applying employment status case law.

Under Chapter 8, the contractor must assess their IR35 status. If they consider the IR35 rules apply to them (inside IR35) then they have to treat their income as if it was the entire cost (including employers NI) of them being hired. This is different to the new off-payroll tax - see later.

The dividend tax changes in April 2016 now mean that a contractor pays roughly the same amount of tax on their income as an employee does on their salary. The vast bulk of perceived avoided tax is avoided by the hirer. About 84% of it. This is why the Off-payroll tax (Chapter 10 of ITEPA, live from April 2017 in the public sector and live from April 2021 in the private sector) is different.

With the Off-payroll tax, there is the concept of a “fee payer”: This is the agency if there is one. Otherwise it is the client. The client must assess the IR35 status of the contractor. The "deemed employer" must then pay over all the taxes if they are inside IR35 by treating the contractors earnings as salary. An agency become the deemed employer if a valid SDS is passed from the client to the worker. Employers NI must be paid on top of the contractors earnings (which is called the “Deemed Direct Payment”). Then, just like salary, PAYE and employees NI is deducted from the contractors earnings. If the contractor is wrongly processed as outside IR35, then the deemed employer is liable for the tax, not the contractor.

The IR35 court case history

In the early days of IR35 HMRC attempted to classify many contractors, particularly in IT, as "deemed employees", but they had very little success. In over a thousand cases HMRC gave up the fight before reaching court.

In the last 28 case decisions, since April 2009 they have only fully won 11.5 cases out of 28 - just a 41% win rate. Two cases have been split decisions, and contractors have won the other 16.5.

HMRC's win in Feb 2018 against Christa Ackroyd was the first case they had won in 9 years, since the Larkstar Data case. Since then they lost the case against Lorraine Kelly, where the judge said it was not a borderline case, and they lost against another presenter, Kaye Adams, because she was in business on her own account (confirmed at UTT in Feb 2021 - although the case went to the Court of Appeal and then back to the FTT again - she still won). Then came a split case with a urologist, followed by another loss against a presenter. HMRC finally won against three BBC presenters in September 2019, This was short lived, becase they then lost to an IT contractor again, with a similar case to Jensel, and then another presenter in Oct 2019. Then HMRC won again against an IT contractor in 2019 and two more presenters in Feb 2020 in Oct 2021. In Feb 2022 HMRC lost the case for Basic Broadcasting Limited, because Adrian Chiles was considered in business on his own account - HMRC appealed the case which got remitted to FTT (decision pending). Following that, at the Court of Appeal, HMRC overturned the decision of the UTT in Kickabout Productions Limited, but failed to do so for the Atholl House case. A series of cases related to taxpayers working at Sky TV have had mixed outcomes, with HMRC winning McCann Media Limited, and Alan Parry Productions Limited, but failing with S & L Barnes Limited. In March 2023 HMRC also lost the case against Gary Lineker Limited.

HMRC’s Litigation and Settlement Strategy (LSS) states (Page 7) "where HMRC believes that it is unlikely to succeed in litigation it will, in the majority of cases, concede the issue". If HMRC are not litigating in a reasonable manner they should be winning at least half of cases. In more recent times this does not appear to be the case. They are only fully winning 41% of them.

List of IR35 court case decisions

Date of case Date of decision Name of case Who won?
03 Aug 2001 12 Sep 2001 Battersby v Campbell HMRC
01 Dec 2001 22 Jan 2002 F S Consulting Limited vs McCaul HMRC
01 Oct 2002 01 Oct 2002 Lime IT vs Justin Contractor
27 Feb 2003 28 Mar 2003 Synaptek vs Young HMRC
15 Aug 2003 03 Nov 2003 Tilbury v HMIT Contractor
01 Jan 2004 08 Oct 2004 Usetech vs Young (inc High Court) HMRC
01 Mar 2004 29 Jul 2004 Ansell Computer Services Contractor
23 Mar 2004 22 Oct 2004 Future Online (inc High Court) HMRC
15 Dec 2004 17 Jan 2005 Netherlane Limited HMRC
28 Jun 2007 05 Jul 2007 Island Consultants Ltd V Revenue & Customs HMRC
23 Jul 2007 20 Dec 2007 Datagate Services Ltd Contractor
20 Sep 2007 11 Dec 2007 Dragonfly Consulting Ltd HMRC
26 Sep 2007 11 Dec 2007 MKM Computing Ltd HMRC
01 Nov 2007 11 Dec 2007 First Word Software Ltd Contractor
22 Jan 2008 19 May 2008 Alternative Book Company Ltd HMRC
24 Nov 2008 15 Jan 2009 Larkstar Data (inc High Court) HMRC
08 Dec 2009 06 Apr 2010 Novasoft Contractor
15 Nov 2010 05 Jan 2011 MBF Design Services v HMRC Contractor
10 Jan 2011 24 Jun 2011 Marlen Ltd Contractor
17 Feb 2011 11 May 2011 ECR Consulting Contractor
12 Apr 2011 06 Jul 2011 Primary Path Ltd Contractor
24 Oct 2011 28 Nov 2011 JLJ Services v HMRC Split case
15 Nov 2016 27 Jan 2017 Armitage Technical Design Services Limited Contractor
26 Sep 2017 14 Feb 2018 Christa Ackroyd (FTT/UT) HMRC
04 Oct 2017 16 May 2018 Jensal Software Limited Contractor
08 Nov 2017 19 Mar 2018 MDCM Ltd Contractor
12 Nov 2018 20 Mar 2019 Albatel Limited (Lorraine Kelly) Contractor
11 Mar 2019 16 Apr 2019 Atholl Limited (FTT/UT/CoA/FTT#2) Contractor
10 May 2019 13 Jun 2019 George Mantides v HMRC Split case
18 Sep 2018 09 Jul 2019 Kickabout Productions (FTT/UT/CoA) HMRC
07 May 2018 18 Sep 2019 PAYA / Willcox / Allday Media [3 x cases] HMRC
08 Oct 2018 25 Oct 2019 Canal Street Productions Contractor
03 Jul 2019 25 Oct 2019 Christa Ackroyd (UT) HMRC
23 Sep 2019 29 Oct 2019 RALC Consulting (FTT/UT) Remitted to FTT
11 Jun 2019 18 Feb 2020 Northern Lights Solutions Limited HMRC
05 Jun 2018 21 Feb 2020 Red, White and Green Limited (FTT/UT) HMRC
22 Oct 2020 18 Oct 2021 Little Piece of Paradise Limited HMRC
11 Nov 2019 09 Feb 2022 Basic Broadcasting Limited Remitted to FTT
05 Oct 2021 10 Mar 2022 McCann Media Limited (FTT/UT) HMRC
27 May 2022 16 Jun 2022 Alan Parry Productions Limited HMRC
29 Jul 2022 12 Jan 2023 S & L Barnes Limited HMRC
27 Feb 2023 27 Mar 2023 Gary Lineker Media Contractor
27 Mar 2023 11 Dec 2023 PD & MJ LIMITED (FTT) HMRC

Updated: Wednesday, 16 February 2022

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