A contractor in the construction industry, Mark Daniels, has won his appeal against HMRC. In MDCM Ltd v Revenue & Customs, HMRC were defending their decision that a contract between Mr Daniels’ personal service company MDMC Ltd and recruitment agency Solutions, which provided his services to Structure Tone Ltd, should have been caught by IR35.
The first tier tribunal found the contract to be one of self-employment and so Mr Daniels’ appeal was successful, despite there being no financial risk to Mr Daniels and no substitution permitted. The most important factors include that he was not controlled by the end user and there was no holiday or sick pay or any other employment benefits. One of the more interesting points was that being paid a fixed day rate indicated self-employment, so was in Mr Daniels favour.
We will have to wait to see if HMRC appeal against this decision. It does however demonstrate that the rules surrounding IR35 are complex if HMRC were unable to prove their decision was correct.