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E4.1008 Appeals and case law

An income tax IR35 appeal is made to the First-tier Tribunal under the normal rules described in Division A5.6 which also contains details of appeals from the First-tier Tribunal.

In an IR35 income tax appeal, it is the intermediary that is the appellant and receives the decision from HMRC. This is because any requirement to pay tax or NIC would be the responsibility of the intermediary. The issue to be decided on appeal is usually whether the worker should be regarded as an employee of the client. As with the majority of other appeals, the burden of proof in an IR35 appeal is on the appellant¹.

All the cases taken so far on IR35 have been appeals following an HMRC determination of status provided for National Insurance purposes. This is for procedural reasons². The cases, however, consider the position for both income tax and NIC. As the key issue to be decided is whether the hypothetical contract between the client and the worker should be regarded as one of employment,