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Upper Tribunal in RALC Consulting Ltd

13 May 2024 / Dave Chaplin
Issue: 4936 / Categories: Comment & Analysis , ITEPA 2003 , Business
Climbing mount improbable

Key points

  • The power balance in IR35 cases is heavily weighted in HMRC’s favour placing significant financial strain on genuine small businesses.
  • The Upper Tribunal ultimately concluded that the First-tier Tribunal had ‘betrayed the law’ by making mutuality of obligation determinative.
  • The correct approach to determine IR35 status ratified by the Court of Appeal involves a three-stage process.

In the article ‘Rough tax justice’ (Taxation 19 December 2019) we explored the IR35 tax tribunal victory (the decision) of IT contractor Richard Alcock and his company RALC Consulting Ltd where ‘Team RALC’ successfully argued that his engagements with clients Accenture and DWP fell outside the intermediaries legislation (ITEPA 2003 Chapter 8).

In that commentary we highlighted the difficulties faced by the taxpayer throughout the case including HMRC’s reluctance to disclose key evidence its dismissal of compelling arguments and its pursuit...

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