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£243,000 IR35 case to be reheard 14 years after contract concluded


Five years after HMRC appealed an IR35 case defeat carrying £243,324 in tax liability, judges have instructed this long-running saga to be reheard despite the work having taken place 14 years ago.

IR35 specialist, Qdos, said the situation “smacks of unfairness” and highlights the “nuances and complexities of the IR35 legislation”.

In 2019, IT contractor, Richard Alcock, successfully appealed HMRC’s view that he belonged inside IR35 when contracting via his limited company (RALC Consulting Ltd) for Accenture and the Department for Work and Pensions, between 2010 and 2015. The tax liability in question amounted to £243,324, before interest and possible penalties.

The case hinged on Mr Alcock being viewed as in business on his own account, in addition to Mutuality of Obligation (MoO) not being present and his clients not controlling the working relationship in a manner that reflected employment. However, HMRC appealed this verdict, largely on the grounds that the First Tier Tribunal did not consider the reality of how the services were provided by Alcock, in contrast to the contract itself.

Five years on, this appeal has been granted. As a result, the Upper Tier Tribunal hearing, held in December 2023, instructed for the case to be reheard – this is despite RALC Consulting Ltd having stopped trading.

Qdos CEO, Seb Maley, commented:“This smacks of unfairness. Five years on from having successfully won this case and fourteen years since the work was carried out, this contractor faces the prospect of being dragged through the tribunal system once more.

“Not for the first time, the nuances and complexities of the IR35 legislation run so deep that Judges can’t seem to interpret it. But as is the case far too often, it’s contractors who pay the price.

“This contractor in particular, whose business no longer trades, is expected to head back to court and prove his innocence again – all while having a tax bill of well over £200,000 hanging over him for the foreseeable future.”

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