Similarly, to the case Larkstar, the General Commissioners have found in favour of the tax payer in the case Wright v HMRC. Undoubtedly, the findings that IR35 did not apply to the assignment was a positive decision for Mr. Wright. However, this headlining case was appealed to the High Court by HMRC. The purpose of this appeal was to clarify the hotly debated fundamental IR35 indicator: control.

The question posed to the High Court was the following: where an individual is under the control of someone other than the client, can HMRC decide that the individual is a disguised employee? Previously, other cases have suggested that this would not be the case. The High Court confirmed this notion and Mr Wright’s case was sent back to the General Commissioners.

Up until this point in the case, it appeared to be a forgone conclusion that Mr. Wright was correct to contest HMRC’s decision that he should account for additional tax and National Insurance Contributions. As a result, Mr Wright did not attend this hearing. However, the clear turning point in the case was the High Court’s instruction to reconsider the decision. Upon request, the Special Commissioner took over this case from the General Commissioner. Unfortunately for Mr Wright, the original decision was overturned based on the significant element of control.

The Special Commissioner argued that control was present in the following circumstances: Mr Wright could be moved to another site/project at the client’s discretion; holidays must be authorised in advance (failure to do so would result in dismissal); Mr Wright could not refuse to undertake any work (the penalty for rejecting work was dismissal); Mr Wright would be directed each morning as to where he would be working and what exactly he was to carry out; Mr Wright was required to work fixed hours and days as required and Mr Wright was not a specialist, he was unskilled hence required extensive direction.

Alternatively, the following items emphasised a lack of control: Mr Wright was not paid when he was absent from work and the client was not always present on site. Thus, a third party had the right to control the individuals in the client’s absence.

On balance, it was evidently clear that a high degree of control was present in this case. As a result, the Special Commissioners concluded that an employment relationship was present between Mr. Wright and his client. This case highlights how important the consideration of control is to employment status.

In addition, the Special Commissioner used the following factors to prove that it was inconceivable that Mr Wright was in business of his own account: there was no ability to profit from sound management; Mr. Wright did not have to draw up accounts and he was engaged on a casual basis without any consideration of specific skills and qualifications. These accumulative factors and the issue of control solidified the view that Mr Wright was in fact an employee.

One prominent question that springs to mind is the following: Why didn’t the High Court determine the outcome of the case opposed to referring it back to the General Commissioners? Firstly, HMRC did not instruct the High Court to make this decision. Secondly, because HMRC did not ask the High Court to make this decision, the High Court had only been supplied with the General Commissioner’s outcome and their reasons for this – they had not been supplied with enough information to reach an outcome. The Special Commissioner were best suited to review this case in order for a fresh set of eyes to assess this fairly. Also, the General Commissioners were soon to be abolished.

Wright v HMRC established important lessons for contractors to learn. Firstly, it is highly important for a contractor to ensure that they attend every hearing. If Mr Wright had attended the Special Commissioner’s hearing, he would have been able to: argue his side of the case; cross examine witnesses and defend himself. Secondly, this case undeniably stresses how important it is for a contractor not to be under any sort of control by their client. As an Independent Contractor, you should have autonomy over how, when and where you work. It is vital for a contractor to dictate their own hours of work. Equally, a contractor should not allow the client to move them to different projects and different sites at their discretion. Finally, this case highlights the importance of receiving professional advice on your IR35 status for each assignment you undertake.