Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Troubling termination

23 March 2006
Issue: 4050 / Categories: Forum & Feedback , IR35
Mr C was employed by B Ltd until the late 1990s when he took a career break. On returning to work with B Ltd he was told that he must provide his services through a company, A Ltd, of which he is the sole director/ shareholder. This arrangement subsequently came within IR35.

Mr C fell ill in April 2004 and B Ltd entered a new contract with A Ltd up to September 2004 subject to
Mr C being able to provide his services. Further work may have been offered thereafter on an ad hoc basis. The contract between A Ltd and B Ltd was subsequently terminated by B Ltd at the end of May 2004.
Following legal advice in August 2004 a compromise agreement was entered into between A Ltd B Ltd and
Mr C whereby A Ltd was offered a further contract until March 2005 conditional upon Mr C being available to work. This contract was not renewed and the last payment received by A Ltd from B Ltd was in March 2005.
Under the terms of the agreement in August 2004 B Ltd paid Mr C the...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon