In a judgment in the case of Cable & Wireless v Muscat at the Court of Appeal it has been held that a limited company contractor was an 'employee' of his client. Whilst at first sight this could be a significant development with adverse consequences for contractors, agencies and end-users, the circumstances in this case were unusual, and it remains to be seen how widely applicable the judgment will prove to be. Mr Muscat's case was a blatant example of the "Friday to Monday" scenario where an employee leaves his Monday to Friday job on the Friday and then turns up as a contractor through his Limited Company on the Monday, only now paying far less tax and NI.

This case if anything is a reminder to all contractors that wish to avoid IR35 of the importance of the right working arrangements and contract being in place between all parties concerned.

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