So, HMRC, how's that windfall coming along?
@HMRC - still struggling to find people to work on your IT projects, or have you bitten the bullet and increased your costs by paying the contractors more so they can cover the additional risks you dumped on them?
Not exactly stellar thinking, and it's not as if they weren't warned. Roll this out to the private sector without some cast-iron directions and it won't be contractors taking you to court. Businesses take a very dim view of loading costs on to them (such as finding people at short notice to fix all the stuff that permies struggle with because they have to adhere to office politics).
Here's a suggestion for a possible test of in/out of IR35 - if the contractor can talk to a senior manager in the business and tell them straight (no need to be rude) that their ideas/decisions are the root cause of some major issue and that contractor is still wanted to work on the project the next day, they aren't an employee.
One of the main reasons I went contracting was to get away from office politics. You don't escape entirely as you can often be used as the lightning rod and expendable flare for managers, but it's nothing personal and they pay you a shit-load for the risk.
Doesn't bother me, because I work hard to have a cast-iron reputation, so loss of contract due to 'unforeseen circumstances' is usually interpreted correctly as having taken a fall for some dick-head in a major corp who can't be sacked (maybe they get moved on somewhere where they can do less harm) - but someone has to take the fall - it happens (not very often fortunately, because as a *real* independent consultant I get to tell the clients' senior staff what they're doing wrong before it comes to a heads-rolling scenario).
You'd be amazed at how few senior company managers hear the *actual* truth from someone at the coal-face that can't just be dismissed as whinging. Some of them actually value it (just keep it civil and constructive).
With regards to this judgement - if it had gone the other way, does the client get back all the VAT that the 'employee' charged them during their tenure? Permie's don't charge their employers VAT after all. I can see companies suing HMRC to recover all that VAT they paid out, they can't have it every which way and not expect some kind of push-back.