An IT Unix Contract John Spencer now retired, was operating through his own limited company, JLJ Services Ltd, for the end client Allianz. The accounting firm providing services to Spencer's limited company deemed that his working practices fell outside of IR35, however HMRC disagreed and ruled that the contracts between 2000 and 2007 were all caught by IR35, and therefore, Spencer was liable for the outstanding tax and NI contributions across the whole 7 years amounting to bill for unpaid taxes, national insurance contributions and penalties totalling £141,000.
After a four year battle with HMRC, followed by an appeal it was accepted that IR35 did not apply for the first 3 years, until 2003, whilst the remaining 4 years
Mr. Spencer has to pay his dues to HMRC.
The reason of Mr. Spencer not able to prove because failed the own business test and he was working under the direction, supervision, and control of Allianz.