HMRC applied the wrong IR35 status in almost every IT Contractor tribunal

We have reviewed all of the IR35 cases that HMRC have taken to court in the past 10 years and the subsequent judgements that have been decided by the UK court/ tribunal system.

The results have delivered a very interesting outcome and prove that HMRC are quite consistently not categorising contractors in the correct way. All the cases can be looked up in the UK courts website for those who like to read the individual judgements https://www.bailii.org/.

We feel that this review should provide informed workers and end clients the comfort that they are in a very strong position to continue operating as a self-employed contractor and that their working relationship with their clients is one that is outside of IR35.

The first table summarises the cases that involve the typical agency contractor and overwhelming show that this type of worker is not caught by IR35 despite HMRC’s claims. HMRC have only successfully proved that IR35 applied to 0.5 of the 9 cases taken to court in the last 10 years.

The second table looks at TV presenters, who have received the heavily publicised headlines in the last few years. Despite the publicity, it shows HMRC have only successfully proved that IR35 applied 2.5 of the 7 cases.

Table 1 - Agency Contractors

Table 2 - TV Presenters and a Medic