ESM8600 | Miscellaneous points: "worker" status in IR35

In the High Court case of Dragonfly Consultancy Ltd v HMRC - see ESM7290, the appellant contended the Special Commissioner should have taken account of the concept of intermediate ‘worker’ status.

Henderson J confirmed the general law of employment does not recognise a third intermediate category between employment and self-employment; therefore there was no reason why the Special Commissioner should have considered any other category. In the context of IR35 the only distinction to be made is whether the notional contract is one of service or not.

The decision can be applied to employment status cases as well as IR35, and the quote from paragraph 59 of the decision will assist our defence of such challenges:

“I can see no reason why the Special Commissioner should have taken into account other possible categories of worker which exist only for the purposes of very specific and self-contained statutory codes. I agree with counsel for HMRC that such categories only have meaning and relevance in the particular contexts in which they are found”.