Peter Vaines bemoans the lack of clarity and uniformity when it comes to decisions around individual’s tax bills – particularly when it comes to the infamous off-payroll working rules.
The recent decision in HMRC v Barnes [2024] UKUT 262 (the outcome hardly matters) is the latest in the increasingly absurd saga of IR35 and the intermediaries legislation in sections 48 to 61 ITEPA 2003, and the equivalent provisions for NIC in Regulation 6 of the Social Security Contributions (Intermediaries) Regulations 2000.
This won’t be the last. In fact, this litigation will continue indefinitely until this wasteful and damaging legislation is amended to something workable.
The absurdity and wastefulness comes from the fact that the courts are able to come to opposite conclusions on virtually, if not exactly, the same facts. There are so many decided cases that HMRC can look at the list and see loads of them which support their view and the taxpayer can do exactly the same. Both sides are therefore encouraged to litigate (and to appeal) and we end up with cases like ‘Atholl House’, where the taxpayer won in the FTT, won again in the Upper Tribunal but then the Court of Appeal remitted the case to the FTT to start all over again. The costs involved exceeded the tax at stake. This means that both sides ended up losing; not for the first time, the only winners were the lawyers. (See also the note below on the decision of the Supreme Court in ‘Professional Game Match Officials Ltd v HMRC [2024]UKSC 29’, which has just been published.)
The inconsistency is not only a colossal waste of time, but it undermines the authority of the Tribunals to have so many cases that are in direct conflict with each other. It is also frustrating for taxpayers and their advisers who do not know where they are – quite apart from the significant question of costs, not least from the public purse. In any other walk of life, the words “not fit for purpose” would spring to mind, and so would the words “something must be done”.
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