How Many IR35 Cases Has HMRC Won? Their Success Rate Explained
Understanding the historical outcome of tax tribunals is essential for any organisation managing an off-payroll workforce. Many hiring businesses and agencies operate under the assumption that HMRC holds an ironclad advantage in status disputes. In reality, evaluating the actual data reveals a much more balanced legal landscape, highlighting the critical importance of robust compliance processes.
How many IR35 cases has HMRC won?
HMRC has fully won 12 out of the last 22 substantive IR35 cases since November 2016, when HMRC resurrected IR35 enforcement, resulting in a 55% win rate in the modern era. That said, 5 of the last 6 cases to enter the tribunal proceedings involved Sky TV freelancers, all of which were won by HMRC on almost identical contracts and facts. Prior to the flurry of Sky cases, HMRC’s win rate was only 44%.
A further important point is that all of the historic tribunals involved individuals under the original IR35 rules, and not the new rules. Unfortunately, individuals are often unable to afford a professional defence involving lawyers and a barrister's representation, giving HMRC a distinct advantage.
Whilst high-profile enforcement campaigns often dominate the headlines, the official tribunal record shows that the Revenue authority regularly faces defeat when challenged by well-prepared taxpayers who can afford the best representation. In the new world of the off-payroll rules, that applies to medium and large businesses; businesses won’t be hamstrung like the individuals.
Overall, what the history demonstrates is that tax tribunals do not simply rubber-stamp HMRC's assessments.
Why is HMRC's IR35 win rate so low?
HMRC’s low win rates stem from their historically narrow approach to matters of employment status case law, which frequently fails to capture the nuanced realities of genuine independent contracting.
In tribunals, judges apply long-standing common law principles established by landmark authorities including Ready Mixed Concrete (1968) and Hall v Lorimer (1994). These cases require a multi-factorial evaluation of personal service, control, mutuality of obligation, and other factors. Because HMRC’s old approach took a narrow view on status matters, views that were subsequently dismissed by the Court of Appeal and Supreme Court, their assessments often misinterpreted the case law, leading to flawed claims that failed under judicial scrutiny.
What do these tribunal statistics mean for hiring businesses?
These statistics prove that outside IR35 determinations can be defended, provided they are well represented and backed by a robust fact-find.
For HR, procurement, and finance leaders, the lesson is clear: compliance cannot be left to untrained staff or over-cautious blanket determinations. To protect your business from costly litigation and liabilities, you must ensure your status determination statements (SDSs) are backed by an expert, defensible methodology that aligns with the contract and working conditions.
Partner with the IR35 experts at IR35 Shield
Do not let flawed assessments expose your organisation to tax liabilities.
Partner with the industry experts at IR35 Shield; we’re here to support you and your business every step of the way. If you need help with your IR35 processes, feel free to reach out. You can email us at info@ir35shield.co.uk or get in touch with an expert to find out how we can help.
