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HMRC internal manual

Employment Status Manual

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HM Revenue & Customs
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Considering the evidence: the evidence of the client

As it is necessary to construct a notional contract between the worker and the client, it is self-evident that it is crucial to obtain evidence from both parties. Whether in a customer service or compliance situation, the initial correspondence will usually have been with the intermediary and/or the worker.

The Presiding Special Commissioner has prepared an explanatory leaflet about IR35 appeals to the Special Commissioners (NB. The explanatory leaflet remains a relevant document following the introduction of the tax Tribunal Service in April 2009) It is stated in that leaflet that “it would be helpful for both the worker and someone from the client to give oral evidence about the factors” relevant to the actual working terms and conditions.

In cases before the Special Commissioners they have commented on the lack of evidence from the client and, in the case of Lime-IT Ltd v CIR (SpC342), the Special Commissioner stated

“In future cases on this legislation (and its income tax equivalent) the Special Commissioners will wish to explore at a preliminary hearing whether it is possible to obtain evidence from the client.”

It is therefore essential that you raise this subject with the intermediary/worker and explore with them the possibility of obtaining evidence from the client.

If it becomes necessary to use the S.20(3) TMA 1970 information power to obtain documentation from the client, please note the guidance at EM2400 onwards.