0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Forgotten your password?

Lack of Mutuality allows contractor to get around HMRC

23 February 2011

The rights of an employer to terminate a contract without notice could be key in deciding whether an independent contractor, trading through a limited company, has to comply with tax avoidance measure IR35.

In MBF Design Services Limited v HMRC the tax tribunal decided that the employer’s right to terminate Mr Fitzpatrick’s contract without notice was “characteristic of a contract for services but quite foreign to the world of employment”. Against this background, other terms of the contract which could be seen as confirming his employee status were given less weight.

This will give some comfort to contractors working on large manufacturing, IT or construction projects where contractors are required to use certain systems and procedures alongside employees, but have no true guarantee of work from week to week.

For employers seeking maximum flexibility from their independent contractors it does give an additional argument “after all…”, they can now explain to would-be contractors working for them “this clause helps you retain your independence ….”

Related opinions

Symptoms of menopause can constitute a disability

The Employment Appeal Tribunal (EAT) recently found that an employment tribunal was wrong to strike out a claim on grounds that menopausal symptoms did not amount to a disability under the Equality Act 2010 (Rooney v Leicester City Council).

View blog

Employment Appeal Tribunal rules no entitlement to pay for zero-hour worker during a period of suspension

In a recent case the Employment Appeal Tribunal determined that, as a zero-hour worker, the Claimant was not entitled to be paid whilst he was suspended pending an investigation into an allegation of misconduct.

View blog

Flexible working and leave for carers

The Government has launched a consultation today on potential changes to the statutory flexible working regime.

View blog

Importance of considering flexible working applications

An employment tribunal has awarded an employee almost £185,000 for indirect discrimination following a failure to adequately consider the employee’s flexible working request.

View blog

Richard Nicholas

Richard Nicholas

Partner and Responsible for In House Lawyers

View profile

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up