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Contractor secures IR35 victory against HMRC after seven year wait
Posted Jan 21, 2011
A Tribunal has found in favour of IT contractor Mark Fitzpatrick, clearing him of using his limited company to avoid tax.
The long running IR35 dispute reached a conclusion when a tribunal cleared Mark of using his limited company MBF Design Services to avoid tax, referring to his time working as a contractor for Airbus.
The Tribunal, sitting in Bristol, found in favour of Mark - noting that the lack of any mutuality of obligation was an important factor in the decision.
Outlining their conclusion the tribunal observed that Airbus could cancel MBF's contract without notice. Specifically, there had been occasions where due to computer failure contractors were sent home without pay whereas employees had to remain on-site.
Mr Fitzpatrick's long battle against HMRC was covered by tax investigation insurance provided by his PCG membership.
Chris Bryce, PCG Chairman, commented:
"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 Mr Fitzpatrick in court, 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."
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