Freelancer Lime-IT wins IR35 battle

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http://www.shout99.com/contractors/showarticle.pl?id=12639

IT freelancer Lisa Fernley’s company, Lime-IT, has won its long-running battle against the Inland Revenue following a judgment by the Special Commissioners.

Lisa had been confident her contract would pass IR35 after conducting her own research and receiving the ‘all clear’ from her independent legal advisor.

The contract ran for 12-months between April 2000 and April 2001 and showed her company was a ‘genuine entrepreneurial business.’

She sent her contract to the Revenue for further confirmation, resulting in a long wait for a formal decision. When a decision was finally given, the Revenue claimed that it was ‘caught by IR35.’

The case which ended in a special commissioner’s hearing in September between the revenue and Lisa F who was repreented by Accountax, prior to that Over 50 letters were exchanged between Lime-IT and the Inland Revenue as well as eight letters to MPs.

Matt Boddington, an Advisor at Accountax directly involved in the case, said: “”It’s a very good, very strong judgment and we probably agree with about 95 per cent of it. There was a good result on the substitution clause and very little to indicate Lisa could have been construed as an employee. The only indicator against her status as an independent business was in the length of her contract.””

Mr Boddington said the judgment would not set any new case law or principles and was not binding, but said it would be useful in the future to refer back, joining other important cases like Battersby and Campbell.

Lisa Fernley said: “”I’m very happy with the judgment and the end of 919 days of uncertainty for my business. I can’t even begin to calculate the total loss to my business it has caused, but it appears the door has been left open to claim costs. That would be a separate case. There was nothing huge in the judgment that leapt out at me, but I do think that after it has been analysed further, it will prove to be a plus for freelancers in the future.””

Lime-IT has 21 days to apply for costs.

Lisa explained the Revenue’s initial decision she was inside IR35 could have been a simple mistake, but said as she supplied more evidence to support she was a freelancer in business on her own account, the profile of the case rose in importance through the Revenue ranks and with it, the importance of a Revenue win to save face.

“”I’m not out for anyone’s blood, I’m just happy to have won,”” Lisa said.
The Inland Revenue told Shout99.com: “”We are studying the decision of the Special Commissioners in this case.””

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