HM Revenue & Customs v Larkstar Data Ltd [2008] EWHC 3284 (Ch) (24 November 2008)

HM Revenue & Customs v Larkstar Data Ltd [2008] EWHC 3284 (Ch) (24 November 2008)

The General Commissioners misdirected themselves in law regarding the tests for employment status, particularly in relation to control and mutuality of obligation, and made findings of fact not supported by the evidence. As a result, their decision that the IR35 legislation did not apply was unsound and must be set aside. The matter is remitted for rehearing by a differently constituted panel.

Citation
[2008] EWHC 3284 (Ch)
Parties
Applicant/claimant: Her Majesty's Revenue & Customs; Respondent/defendant: Larkstar Data Ltd
Jurisdiction
England and Wales
Judgment Date
24 November 2008
Procedural Posture
Appeal / Judgment on Appeal From General Commissioners
Outcome
appeal allowed
Legal Topics
IR35 Legislation, Employment Status, PAYE Liability, Social Security Contributions, Contract for Services Vs Contract of Service
Tax Law Employment Law Social Security Law IR35 Legislation Employment Status PAYE Liability Social Security Contributions Contract for Services Vs Contract of Service

Case Brief

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Parties

Her Majesty's Revenue & Customs

Applicant/claimant

Larkstar Data Ltd

Respondent/defendant

Procedural Posture

Appeal / Judgment on Appeal From General Commissioners

Legal Issues

  1. 1 Whether the IR35 legislation applies to the arrangements between Larkstar Data Ltd and MBDA via TPS for the provision of Mr Brill's services
  2. 2 Whether, under a hypothetical direct contract between Mr Brill and MBDA, Mr Brill would be regarded as an employee or independent contractor for tax and NIC purposes

Ratio Decidendi

The General Commissioners misdirected themselves in law regarding the tests for employment status, particularly in relation to control and mutuality of obligation, and made findings of fact not supported by the evidence. As a result, their decision that the IR35 legislation did not apply was unsound and must be set aside. The matter is remitted for rehearing by a differently constituted panel.

Court Disposition

appeal allowed

Orders

  • Decision of the General Commissioners set aside
  • Matter remitted to the General Commissioners for rehearing by a differently constituted panel