Tax cases

IR35 applies

R an information technology specialist was employed as a consultant by the appellant company. R and his wife owned all the company's issued shares. From 1 July 2000 until 30 May 2003 R was contracted to work with EDS Ltd. The Revenue said that by virtue of the IR35 legislation the company should pay tax under PAYE and Class 1 National Insurance on the basis that both were payable in respect of the amounts received by the company for R's services for EDS Ltd as though those amounts were salary paid by the company to R. The company appealed.

The Special Commissioner found for the Revenue so the company appealed.

In the High Court Sir Donald Rattee said that on the facts found by the Commissioner he was entitled to conclude...