On the first day it seemed the P.C.G had put there case forward well, and it seemed had gained some support.
The judge asked the question "why don't employment agencies co-operate with contractors by avoiding standard contracts?", to which Barling replied thet they were not really phased by it as it did not really bother them. This also raised the point that you would now have thousands of tax inspectors all making inconsistent decisions. It was also stated that this would affect the smaller independant contractor far more than a big consultancy with more full time employees.
The judge then made an offer to make a court direction to require an agency to assess whether a contractor in a particular engagement was in buisness on his own account, but Barling said this would not help because various factors were responsible for status according to IR35 Barling also stated that any direction from the court would also only be able to affect contracts after they were signed, and thus you could not check a persons status before a contract was signed.
During the day the judge "stumbled" upon a very valid point ,which had not been brought up yet when he asked how much commision an agent normally charges, when he was told it was 20% he then asked if it was dedutable from the 5% This caused a stir in the courtroom and plender could only reply that in his knowledge it would be, but that won't be the last we hear of that point.
Another question asked was "If you pay the N.I.C'S as a disguised employee are you entitled to the benefits?" We all thought the answer to be no, but in response Plender said that you were never actually unemployed as you were actually employed by your own limited company. The judge then stated that he was not convinced on this subject of the contractor being at a disadvantage because of a lack of benefits, and the argument seemed to be left there.
The judge then asked Barling what exactly it was he was supposed to be deciding. It was then seen as the judge having to decide if ir35 was a state aid, and if so, on what grounds was the decision justified. If the decision was justified as a tax avoidance scheme that would be fine as long as it was proportional. Barling maintains that ir35 is not proportional, and thus can not be justified.