A freelance engineer has been cleared of using his limited company for tax avoidance purposes, it has been reported.

Mark Fitzpatrick defeated HM Revenue and Customs (HMRC) at a first tier tax tribunal, after the agency claimed he had avoided tax while working inside IR35 legislation.

The tribunal reported a case victory across all three IR35 pillars noting a lack of Mutuality of Obligation as a significant factor in their decision.

PCG chairman Chris Bryce, who is currently a consultative committee member at the Office for Tax Simplification (OTS), described the outcome as “a significant victory for the freelance community”.

He stated: “It has been tough on Mark, a freelance contractor of great integrity and we are delighted for both him and his family.

“It shows yet again that IR35 is wasting taxpayers’ money in its application to freelancers. We are working closely with the OTS to try and bring clarity for the freelance community.”

The future of IR35, a much maligned piece of legislation, is currently being reviewed by the OTS.

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