E C R Consulting Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 11 May 2011
Neutral citation: [2011] UKFTT 313 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
E C R Consulting Ltd (controlled by Miss Richardson) appealed HMRC determinations that IR35 applied to her engagements with Vertex Data Services via agencies. The Tribunal analysed contracts, factual arrangements and decided the hypothetical contract would have been a contract for services because substitution rights were effective and VDS did not exercise sufficient control. The appeal was allowed and the determinations were cancelled.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal’s reasoning indicates that, for IR35 purposes, the terms of intermediary and agency contracts can be imported into the hypothetical contract and that a genuine right of substitution (even if subject to client approval) together with absence of employer‑style control points to a contract for services rather than a contract of service.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The decision suggests (obiter) that where a client is primarily procuring suitably skilled contractors via an agency at commercial rates, that agency‑led procurement supports self‑employment status, and that contractual clauses denying an employment relationship are relevant and may carry weight when the surrounding arrangements exhibit self‑employed features.