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VICTORY FOR THE TAX PAYER
29 May 2009
HMRC have been challenging the status of construction subcontractors for a number of years now and there is to be no let up despite the harsh economic conditions.
It seems in fact that the Government are to do quite the opposite, having reaffirmed in the recent budget that they are committed to combating what they perceive as “false-employment” within the construction industry.
In the recent case of J L Windows & Door Services and Malloy v. HMRC however, the Special Commissioners rules against HMRC’s claim that Mr Malloy was an employee.
HMRC had assessed, during a Compliance Review that all JL Windows subcontractors were in fact employees.
Special Commissioner John Clark reviewed thoroughly the legal precedents which have been key to previous HMRC challenges to employment status including the areas surrounding Mutuality of Obligation and Control.
In considering the question of mutuality, the Special Commissioner agreed with earlier precedent that the mere presence of mutuality of obligations could not by itself be enough to create ‘employment’ but that it had to be alongside something else – i.e. control.
He further went on to make clear what does and does not constitute control.
This case is well worth a read if you have the time.
At EEBS, we appreciate that most construction industry contractors have neither the time nor the inclination to get involved in complex legal issues that are changing daily and require constant monitoring and expert analysis.
That is one of the main reasons our clients make use of our comprehensive services. We are always up to date with the latest legislation and legal landscape.
Alongside our team of legal and taxation experts, we are able to offer solid protection and peace of mind, allowing our construction industry clients to get on with what they do best.
