A long-standing IR35 case, carrying a tax liability of £243,324, is to be reheard more than a decade after the conclusion of the contract in question.
This decision comes five years after HMRC initially appealed the case’s outcome, marking yet another twist in a saga that has captivated the contracting community.
The case revolves around IT contractor Richard Alcock, who successfully challenged HMRC’s classification of his employment status while contracting through his limited company, RALC Consulting Ltd, for Accenture and the Department for Work and Pensions between 2010 and 2015.
At the heart of the matter lies the interpretation of IR35 legislation, which determines whether contractors are genuinely self-employed or should be treated as employees for tax purposes.
A request for a rehearing
Initially, Alcock’s victory seemed decisive, with the tribunal ruling in his favour based on criteria such as the absence of Mutuality of Obligation (MoO) and the independent nature of his business relationship with clients. However, HMRC contested the decision, arguing that the tribunal failed to adequately consider the practical working arrangements between Alcock and his clients.
Now, five years on from the initial appeal, the Upper Tier Tribunal has granted HMRC’s request for a rehearing, despite the significant passage of time since the original contract and RALC Consulting Ltd ceasing trading. This decision has reignited concerns about the fairness and complexity of IR35 legislation, with experts warning of the potential consequences for contractors.
The burden on contractors
Seb Maley, CEO of IR35 specialist firm Qdos, expressed his dismay at the situation, emphasising the burden placed on contractors by the legal intricacies of IR35. “This smacks of unfairness,” Maley commented. “Five years on from having successfully won this case and fourteen years since the work was carried out, this contractor faces the prospect of being dragged through the tribunal system once more.”
Maley’s remarks underscore the broader frustration within the contracting community, where uncertainty surrounding IR35 continues to create challenges for individuals navigating the tax landscape. As the case prepares to return to court, the outcome remains uncertain, leaving Alcock and others like him in limbo as they await further legal proceedings.
For now, the rehearing of this high-profile case serves as a stark reminder of the complexities and consequences inherent in the interpretation of IR35 legislation, with contractors left to bear the brunt of its ambiguities.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
