Phil Winfield, director of Primary Path Ltd, had eight years of IR35 misery ended when the First Tier Tax Tribunal upheld his company's appeal against PAYE and NIC assessments.
Primary Path had been engaged by the pharmaceutical group, GSK, via an agency, to design and build a specialist interface. Unlike many contractors' past experiences, the Tribunal Judge found that there was a reasonable degree of consistency between the lower and upper level contracts which greatly assisted in the construction of the hypothetical contract.
Other than checks for standard and quality Mr Winfield carried out the services with little interference from GSK and this enabled the Tribunal to conclude that the level of control or supervision did not go beyond that which would be expected in hiring an independent contractor. Added to this was that the Tribunal found that there was no obligation beyond paying for work done by the contractor. There was also the ability for Primary Path to propose a substitute worker.
The existence of a pay-as-you-go relationship between the parties was apparently a key factor in the ruling. Fees charged by reference to an hourly rate and for hours worked were acknowledged as a feature of the way business is conducted in the present world.
When taking into account all the factors the Tribunal found that it was clear that the relationship between GSK and Primary Path was one of independent services and not that of an employee and employer.
How come it took eight years to resolve if the conditions mentioned were part of the case?
You would have to ask Mr Winfield and his representative as to why the enquiry took so long to resolve. Usually, however, the reason for protracted IR35 enquiries is due to a stubborn Status Inspector, supported by HMRC hirearchy, who firmly believe their case has good prospects of succeeding and securing a high tax yield. In all my years of defending contractors in these sort of enquiries there have been several that lasted 5 years for precisely this reason.