More Harm Than Good

THE SPECIAL COMMISSIONER'S decision in the Lime-IT case is on the face of it the first meaningful case law decision on the personal service company legislation. The previous cases that have been heard there were taken by the Revenue because the appellants were taxpayers with weak cases representing themselves. This was much more of a real life case with different factors pointing in different directions and the taxpayer was advised by David Smith of Accountax Consulting Ltd. He is leading adviser to the Professional Contractors Group and the author of Tolley's IR35 Defence Strategies and so the case was well presented from the appellant's point of view.

The sole shareholder and director of the appellant company Lime-IT Ltd was Miss Lisa Fernley. In April 2000 the company entered into a contract with an intermediary company Executive Recruitment Services Plc which then supplied...