Court of Appeal rules in contractors' favour

HMRC’s argument was that the Upper Tribunal had interpreted a key piece of case law incorrectly. The case in question sets out the factors that should be considered, such as mutuality of obligation, personal service and others. HMRC argued that whether someone is “in business on their own account” (i.e. other factors) should be given little weight, and even argued that considering this would be an onerous compliance burden for HMRC. In a decision published today, the Court of Appeal unanimously rejected this argument, stating that circumstances known to both parties at the date of the contract, e.g. the fact that the person providing the work has an established career as a freelance worker, should be taken into account. This is a huge win for all contractors, particularly those providing personal services.

The decision on whether, overall, there would have existed an employment relationship in this case was remitted back to the Upper Tribunal.