IR35 Victory: Freelancer was always in business

A five and a half year conflict with the taxman has ended in victory for ECR Consulting Ltd (ECR), Elaine Richardson.

The ruling in the IR35 case of ECR was a triumph for the taxpayer and stated “it is clear to us that ECR is a genuine business and therefore not a target of the IR35 legislation.”

Elaine Richardson, an IT contractor, was in November 2005 accused of being a disguised employee whilst working through her own limited company for Vertex Data Science. She was therefore facing a tax bill in excess of £50,000.

In its robust verdict, the tribunal recognised that ECR was clear of IR35 when applying all three key status tests, Mutuality of Obligation, Substitution and Control, noting:

“ECR operates from a dedicated business area at her home. It has a company domain and website. ECR advertises its services and is a member of the PCG. It has retained reserves and invested in development and has over the years taken on fixed price work for a variety of clients.”

So guys, make sure you have a website and a home office, PCG membership and advertise (on this site?) to keep the tax man happy.

How do you stay clear of IR35?

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Written by Editor on May 21, 2011 and filed in Featured, Freelancers, Money , ,

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