HMRC has recently managed to somewhat spectacularly fall foul of its own employment rules, as an independent contractor took them to court for unpaid holiday allowance.

Susan Winchester, an independent marketing and business development consultant, settled out of court over the issue of £4,200 of unpaid holiday after she was forced to go on payroll as an employee.

Originally engaged by HMRC in 2016, Winchester was put onto agency payroll after HMRC ran a CEST check and determined that the newly implemented IR35 rules regarding off-payroll employees would apply. Whilst she couldn’t challenge the decision, Ms. Winchester claimed that the fact that she was now designated an agency worker meant that she was entitled to the full holiday benefits enjoyed by HMRC employees and took HMRC to court to prove it.

Whilst an amusing incident of HMRC being tripped up by its own complexity, the case could represent a major landmark for the treatment and employment status of independent contractors. After the many changes employers and contractors have had to make as a result of IR35’s implementation, where contractors stand in the mix is as unclear as ever. The resolution of this case could potentially pave the way for similar pay-outs across the public sector as contractors begin to stand up for their employment rights.

If you’re concerned with how IR35 affects you or your employees’ rights and entitlements, get in touch with your local AIMS Accountant today!

Contact your local AIMS Accountant for more information.