IR35 Case – Thirteen Reasons Why Gordon Stutchbury is Disguised Employee according to HMRC.
The High Court last week heard an appeal from Gordon Stutchbury against the HMRC over the decision by the General Commissioners that his contract with EDS for the Benefits Agency was inside IR35.
On the second day of the trial, the HMRC barrister put the reasons why they believed Gordon was an employee of EDS.
Caught by IR35
They were the following:
1. His contract was for a certain period and not for a project
2. He did a set number of hours, i.e. 37.5 hours a week – exactly the same as an employee
3. He worked mainly at the site of the ’employer‘ EDS for the Benefits Agency
4. He mainly used his ’employer‘s‘ equipment as a normal employee would
5. He worked alongside EDS employees
6. They even gave him a grade and a job description
7. He had a line manager like ‘other‘ EDS employees
8. EDS employees told what to do and where to do it
9. EDS had the ultimate sanction of termination of his ’employment‘
10. He had to follow the ’employer‘s‘ dress code – indeed he sometimes got into trouble for not doing so
11. He had to book his time off for holidays like a normal employee
12. EDS were required to pay Gordon for 37.5 hours a week, and Gordon was required to work it
13. He had no risk of loss, as small businessmen would, as they paid his invoices weekly
The HMRC barrister later argued that many of the points that Gordon‘s barrister made about Gordon‘s status were not incompatible with Gordon being an employee. However, the same could be said here. So, all of the above are not incompatible with being a contractor in business on his own account.
In my view, therefore, they do not make him an employee. However, several other differences, especially in their totality would lead one to believe that Gordon Stutchbury was not a normal ’employee‘.