Freelancer wins seven year IR35 battle with HMRC

PCG member Mark Fitzpatrick celebrated today after a seven-year dispute with HMRC was ruled in his favour.

The long running IR35 battle reached a conclusion when a tribunal in Bristol cleared Mark of using his limited company MBF Design Services to avoid tax, in reference to his time working as a freelance contractor for Airbus.

The tribunal noted a lack of ‘Mutuality of Obligation,’ as a significant factor in their decision.  Mr. Fitzpatrick was backed by the PCG with tax investigation insurance and the case is a significant win for the freelancer community. The battle underlines the protection PCG can provide it’s members who find themselves under HMRC investigation.

In a PCG press release, PCG Chairman and OTS Consultative Committee member Chris Bryce said: “This is a significant victory for the freelance community with particular emphasis on Mutuality of Obligation – a forgotten core principle of being in business.”

Matt Boddington, of Accountax Consulting who represented Mark at the Tribunal, said: “This is a significant bloody nose for HMRC and highlights that if parties arrange their affairs correctly and if these arrangements are an accurate reflection of reality then the IR35 legislation simply will not bite.”

Mr Fitzpatrick, a freelance design engineer and sole proprieter of MBF Design Services in Bristol, said: “It has been a long and testing journey but with the unwavering help and support from all involved justice has finally been achieved, I want to thank everyone who supported me.”

Bryce added: “It has been tough on Mark, a freelance contractor of great integrity and we are delighted for both him and his family. It shows yet again that IR35 is wasting taxpayer’s money in its application to freelancers. We are working closely with the Office of Tax Simplification to try and bring clarity for the freelance community.”

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Written by Alistair Beech on January 20, 2011 and filed in Freelancers, News , , ,

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