Lack of MOO wins IR35 case

The latest IR35 tax case has been won by the contractor.  The tax tribunal cleared the contractor, Mark Fitzpatrick, of using his limited company to avoid tax while working at Airbus.  The tribunal found in the contractor’s favour – noting a lack of ‘Mutuality of Obligation’ (MOO) as a significant factor in their decision.

Their decision apparently hinged on the fact that Airbus could cancel the contract without notice. Specifically, there had been occasions where due to computer failure contractors were sent home without pay whereas employees had to remain on-site.

Matt Boddington, of Accountax Consulting who represented Mark at the Tribunal, said: “This is a significant bloody nose for HMRC and highlights that if parties arrange their affairs correctly and if these arrangements are an accurate reflection of reality then the IR35 legislation simply will not bite.”

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