Tax case against a locum doctor is finally settled

After a long legal battle, a doctor who provided services via a personal service company to two hospitals has been considered an employee.

In Mantides vs HMRC George Mantides was a locum urologist at two hospitals in 2013 – Medway Maritime Hospital, and Royal Berkshire Hospital.

HMRC investigated his worker status. They believed that he was operating as a disguised hospital employee and not paying the correct level of tax or insurance.

Mantides challenged this at the First Tier Tribunal (2019). The FTT made a split ruling, ruling that Mantides’ contract with Royal Berkshire fell within IR35. He could be regarded as an employee in tax terms, but outside IR35 at Medway (not considered an employee).

HMRC planned to appeal the decision in 2021 but missed the deadline for submitting the appeal and was denied a time extension.

Mantides appealed to the Upper Tier Tribunal about the Royal Berkshire decision, but the verdict was not published until the Upper Tier Tribunal had decided on the separate case of football referees.

The Supreme Court of Canada ruled that in the case Professional Game Match officials vs HMRC late 2024, there were two elements essential for a test of worker status: reciprocity of obligations and a degree of control sufficient.

The UTT has dismissed Mantides’ appeal, and upheld FTT’s original decision. They argued that Mantides had no right to substitute and was under excessive control.

Seb Maley CEO of IR35 specialist Qdos said that the case showed the complexity of employment status.

He said that “freelancers, contractors, and businesses who hire these workers should pay attention to employment status compliance if they wish to avoid repeating the same scenarios.”

There were a number of indicators that pointed to a relationship between employer and employee. Mutual obligation was one, as well as no right of replacement.

“But this does not mean that every contractor who cannot provide a replacement belongs in IR35. Status is a picture-painting exercise, where dozens of factors are taken into account before making an informed assessment.

It’s impossible to ignore the length of time that it took for everything to come together. The work was done 12 years ago. These cases are so long and drawn out that they need to be addressed urgently, both for the person at the centre of them as well as the taxpayer’s money.”

Dave Chaplin CEO of IR35 compliance company IR35 Shield said that the “nuanced aspects” of this particular case hampered Mantides’s ability to win his appellate.

He said: “It is frustrating to hear that the upper level relied on an FTT to determine that control was neutral, especially when an independent doctor like Mantides has complete autonomy and authority in his decision-making and ultimately answers to the General Medical Council and not MMH and RBH.”

“I believe that if all factors had been considered, the higher-tier could have reached a different conclusion.” Now we are left with an absurd situation in which two engagements that were almost identical have been decided two different ways with a six-year gap between the decisions. During this time, case law has advanced considerably.

The Employment Rights Bill does not include the Next steps to make work pay document that proposed simplification in determining worker status.

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