Is this the end for Freelancers? A recent high court decision in the Dragonfly IR35 case could on first reading, indicate that it could be.
The Dragonfly case relates to the affairs of Jonathan Bessell and his company Dragonfly Consultancy Limited. It looked at whether Mr Bessell was in effect an employee of the AA to whom his company provided services. The case paid particular attention to whether Mr Bessell had the right as part of his contract with the AA to provide a substitute to carry out the work or whether he needed to carry out the work in person and to what degree the AA controlled Mr Bessell in his work.
In the Dragonfly case there was plenty of evidence to show the AA only wanted Mr Bessell to carry out the work and that there was a right of control by the AA. Hence the high court found in the commissioners favour and Mr Bessell was presented with a £99,000 tax bill.
It is not all bad news for freelancers though as each case will depend upon its own facts, so you should not rush to throw in the towel. Any company whose services fall under the IR35 legislation will need to look at the contents of their own contracts. It does remain possible to have a contract which is IR35 proof and it is well worth reviewing your contracts to see how they would stand up in an investigation.