“It’s shambolic” : IR35 specialist reacts to HMRC missed deadline to appeal locum doctor contract

IR35 specialist, Qdos, have responded to the news that HMRC has been denied the chance to appeal an outside IR35 verdict at the Upper Tier Tribunal (UTT) after submitting their application after the deadline. 

It has also been revealed that this UTT, which focused on two contracts, has delayed making a decision on the second contract until another tax case (PGMOL v HMRC) has its result published. 

The two contracts involve locum doctor, George Mantides. At a First Tier Tribunal in 2019 it was decided that one contract he held with Royal Berkshire Hospital (RBH) belonged inside IR35. The other, which was held with Medway Maritime Hospital (MMH), was considered to be outside IR35.

HMRC was due to appeal the MMH verdict, while Mr Mantides appealed the RBH decision at the UTT.

“That HMRC missed the deadline to appeal the contract Mr Mantides held with Medway Maritime Hospital tells you everything you need to know about the efficiency of the tax office,” said Qdos CEO, Seb Maley.

“Not only does HMRC regularly struggle to identify if a contract belongs inside or outside IR35, but they aren’t organised enough to lodge an application to appeal despite it being something as significant as an Upper Tier Tribunal. It’s shambolic,” said Maley.

“With regards to the second contract, held with Royal Berkshire Hospital, it shows how important the upcoming PGMOL verdict may prove to be. This decision is imminent, could impact the outcome of several cases and prove that HMRC’s view of one crucial aspect of IR35 case law doesn’t stack up. 

“Like Mr Mantides’ contract, the PGMOL case, involving professional football referees, hinges on whether the individuals in question were mutually obliged to work for their client, in the way that employees are. If it’s found that Mutuality of Obligation doesn’t exist, then HMRC’s IR35 tool, CEST, is fundamentally flawed and hundreds of thousands of IR35 decisions it has made will be questioned.” 

Read more of the court decision here

Background

Dr George Mantides is a consultant urologist who is appealing for help to finance a challenge to HMRC on the “unfair classification” of himself and other independent healthcare professionals as employees “purely for tax purposes without any employee benefits-IR35.” 

“My fellow healthcare professionals and I are being treated as employees purely for tax purposes and do not receive any employee benefits despite providing our services as independent practitioners to the NHS. In doing this, we travel all across the UK, pay for accommodation and meals at our own expense- providing a much-needed service to the users of the NHS,” wrote Mantides on his Crowd Justice page.

“HMRC has sought to class us as employees purely for tax purposes and charge us both employer and employee taxes, whilst also refusing to let us offset our legitimate travel and accommodation expenses. 

“This has had the effect of dramatically reducing the number of healthcare professionals providing their services, especially to the more remote places- to the tune of 11,000 doctors according to data,” said Mantides.

According to the consultant, HMRC is going years backwards to retrospectively charge healthcare professionals for taxes on the assumption that they were always disguised employees, something that Mantides says the courts have disagreed with in more than 80% of cases at tribunal.