Consultant urologist Dr. George Mantides has lost his long-running IR35 case concerning his engagement with Royal Berkshire Hospital. In a decision handed down by the Upper Tribunal, the court upheld the First-Tier Tribunal’s earlier decision that the engagement was inside IR35.
This notches up HMRC’s seventh IR35 win in a row – a clear signal to contractors and engagers that the courts are increasingly siding with HMRC on employment status.
Background: two contracts, two outcomes
For those unfamiliar with the history of this case, it originally concerned two separate NHS engagements carried out by Dr. Mantides via his limited company throughout 2013. He provided urology services at Medway Maritime Hospital and Royal Berkshire Hospital during this period.
In May 2019, the First-tier Tribunal (FTT) heard both cases together and delivered a split decision:
- Medway Maritime Hospital (MMH): The FTT found that this engagement fell outside IR35. The presence of a genuine right of substitution, a one-day notice period, and limited control by the hospital were key factors.
- Royal Berkshire Hospital (RBH): The FTT held that this engagement was one of employment for IR35 purposes, for reasons including requirements for personal service, control, and mutuality of obligation (MOO).
Dr. Mantides appealed the RBH decision, while HMRC sought to challenge the MMH ruling. However, HMRC missed the appeal deadline, so only the RBH appeal moved forward.
Grounds of Appeal
Dr. Mantides was granted permission to appeal the RBH decision on three grounds:
- Ground 1: The FTT made an error of law in that it found that the hypothetical contract between RBH and Mr Mantides would have contained a provision that RBH would have to give at least a week’s notice to terminate it early. That was an error of law because it was not a conclusion available to the tribunal on the evidence before it;
- Ground 2: The FTT found that in the hypothetical contract RBH would have been under an obligation to use reasonable endeavours to provide 10 half day sessions in a week. That was a conclusion which was not available to the tribunal on the evidence;
- Ground 3: As a result of these errors the FTT erroneously concluded that the notional contract would be one of employment. That was an error of law.
Decision delayed pending PGMOL outcome
The appeal was first heard in part back in July 2021, but due to the decision hinging on the correct interpretation of MOO, the process was then delayed for several years while awaiting the outcome of the Supreme Court’s decision in the PGMOL case. This was finally handed down in September 2024, clarifying that MOO, for tax status purposes, is established by a simple wage-work bargain, i.e. a promise to perform work in return for pay.
The MOO minefield & case law progression
The key question was whether the hypothetical contract between Dr. Mantides and RBH had the necessary MOO to qualify as an employment contract under IR35.
The FTT had originally concluded that MOO was present because:
- RBH was under a duty to use “reasonable endeavours” to provide 10 half-day sessions per week.
- Combined with an obligation on Mantides to work and the hospital to pay, this was deemed sufficient to satisfy MOO.
The Upper Tribunal found that the FTT had made material errors of law in its reasoning about MOO:
- There was in fact no contractual obligation on RBH to provide work. The FTT’s conclusion that RBH would have used “reasonable endeavours” to provide sessions was not supported by the evidence.
- The hypothetical contract was actually terminable without notice, which the UT said pointed against employment, albeit weakly.
- The PGMOL Supreme Court ruling, which came during the appeal process, confirmed that a simple wage-work bargain is sufficient to establish MOO – even if there is no obligation on the engager to offer continuing work.
The Tribunal found that, despite the FTT’s errors, there was still mutuality of obligation at the first stage in the form of a wage-work bargain. However, the absence of any obligation on RBH to provide work was relevant at the third stage.
While this factor pointed against employment, the Tribunal considered it relatively weak in the context of a short-term locum engagement and not enough to outweigh the overall picture.
Taking into account the FTT’s errors and now armed with the new precedent provided by the PGMOL judgment, the Upper Tribunal re-made the decision and ultimately reached the same conclusion as the FTT: the RBH contract was a contract of employment and therefore inside IR35.
It is important to note that the appeal was based on the original 2019 FTT findings, which predated the significant case law developments of PGMOL and also Atholl House in 2023. In PGMOL, the Supreme Court highlighted the importance of control and other surrounding factors, reinforcing that IR35 status cannot be determined by MOO alone.
Years of uncertainty
While Dr. Mantides was fortunate to raise over £23,000 in crowdfunding to support his appeal, it doesn’t take away from the fact that this case hung over him for 12 years. Few individuals have the financial backing, time, or resilience to keep fighting such a long-running dispute.
Mantides’ case is unique in that there was a major development in case law precedent during the appeal process. Had employment status case law not developed as it did during the appeal process, would the outcome have been different? It’s impossible to say. But it shows how long the uncertainty can last, and how complexity arises from factors that evolve over time.
Final thoughts – the “full picture” still reigns supreme
Although the Mantides judgment adds to the growing body of IR35 case decisions, due to its timeline it doesn’t really tell us anything new and more just reinforces the courts’ position on MOO as set out in PGMOL.
The key messages are: keep up to date with case law precedent as it is continually evolving, and remember: IR35 status is about the full picture. Even when individual factors point away from employment, nothing is decisive on its own. The courts will look all elements of the working relationship, so if the working practices and contract do not stack up across all key status indicators, you are on shaky ground.
