(Sourced from PCG http://www.pcg.org.uk)
Tribunal cites lack of ‘mutuality of obligation’ as key to ruling in favour of taxpayer.
The first tier tax tribunal has awarded in favour of freelance engineering contractor and PCG member Mark Fitzpatrick against Her Majesty’s Revenue and Customs (HMRC) over controversial tax status law IR35.
Mr Fitzpatrick was officially cleared of using his limited company MBF Design Services to avoid tax, in reference to his time working as a freelance contractor for Airbus.
The tribunal reported a knock-out case victory across all three IR35 pillars noting a lack of ‘Mutuality of Obligation,’ (MOO) as a significant factor in their decision. Key MOO points in favour of MBF included:
· Airbus could cancel MBF’s contract without notice.
· Specifically there had been occasions where due to computer failure contractors were sent home without pay whereas employees had to remain on-site.
Mr Fitzpatrick, represented in court by Accountax, relied on support via tax investigation insurance from PCG, the leading trade association representing the freelance industry to make his defence – this funded his seven year legal battle.