HMRC has broken its losing streak before the IR35 courts this week after defeating a trio of BBC presenters on an IR35 appeal. Joanna Gosling, BBC News presenter and journalist, David Eades, director of BBC's The World Today and Tim Willcox, BBC World News presenter, were pursued after a combined £ 920,000 tax bill, reported by  The Telegraph .
While the decision was divided – much like Kaye
Adams and Paul Hawksbee's IR35 courts – that fell in favor of the Treasury
HMRC's history of losing IR35 cases in the broadcast
The Treasury has a recent history of losing IR35 courts, especially in the broadcasting industry. A series of HMRC defeats started with the high-profile First-Tier Tribunal of Lorraine Kelly followed quickly by Loose Women & # 39; Kaye Adams and TalkSPORTs Paul Hawksbee . However, all three had common stickers; control and reciprocity of obligations were highlighted as blurry due to the nature of the roles the presenters performed.
Ex-Qdos and current Larsen Howie treasurer Andy Vessey ATT
said of HMRC's previous court action:
"These rulings emphasize that although personal service can be a requirement in the total contract, and it will always be with TV celebrities, provided that the other important status factor for control rests in the worker's favor and combined with For other tests that point to self-employment for a good target, the IR35 should therefore be comfortably rejected. "
" A word of caution to those TV presenters who are currently investigating or waiting for their appeal to be heard by the board who may have believed the cases of Lorraine Kelly, Kaye Adams and Paul Hawksbee give renewed hope, "warns Lorraine Kelly was especially viewed by Judge Jennifer Dean as an entertainer and therefore much more than a program manager. In the committee's opinion, ITV did not use a & # 39; server & # 39 ;, but purchased a product, namely the brand and individual personality of Lorraine Kelly. She presented herself as a brand and that's what ITV was looking for when she engaged her. "
What caused BBC presenters to lose the IR35 appeal?
Vessey's warning is even more relevant now as Gosling ,
Eades and Willcox ̵[ads1]1; all 'notorious' presenters, so to speak – have lost theirs
Another high profile broadcaster who lost the IR35 appeal
Ackroyd back in February 2018. The distinction between Ackroyd and
others who prevailed in their courts boiled down to a long-term contract, a
clothing allowance, a huge amount of BBC control over her work and no
real ability to work with other clients outside the BBC. The same aspect of
control exercised by the BBC over the contractors' daily work and freedom to
collaboration with others was present in the cases Gosling, Eades and Willcox.
The three BBCs, much like Adams & # 39; and Hawksbee's cases
the presenters were met with a split decision by the two judges above
their employment status. However, the recent ruling was settled in HMRC
favors the vote of Judge Harriet Morgan, who stated that it was:
“Sufficient reciprocity and at least an adequate framework for control to place
they assumed the relationship between the BBC and the presenters in employment
BBC and IR35
The BBC has been somewhat welded to IR35 since the public sector reform came into force in April 2017. The BBC chiefs were held accountable to the Public Account Committee for their use of PSCs and riff rug IR35 regulations in the organization. It was also found that the broadcaster had failed to properly explain the risks of using PSCS to its self-employed, despite admitting that & # 39; many entrepreneurs may have had little choice in their use of corporations due to the BBC's contract specifications. & # 39;
PAC's report reads:
& # 39; Before 2013, the BBC only hired freelance representatives in longer-term or higher-paid roles through a PSC to transfer the tax risk, and potential associated costs, from itself to the PSC. This policy required individuals to create a PSC if they did not already have one. "
" The BBC asked affected individuals to apply for independence
financial advice, but failed to pronounce them PSC's tax
responsibility or the risk they faced from HMRC if they received the tax
payments wrong. & # 39;
In the cases of Gosling, Eades and Willcox, the Tribunal confirmed that the BBC had left the presenters with very little choice but to offer their services via PSCs, and had in fact failed to warn them of the risks involved with the operation. through a corporation. In the case, it was noted that 'the BBC was in a unique position and used it to force presenters to enter into contracts through the PSCs and to accept pay reductions.'
Joanna Gosling, David Eades and Tim Willcox about their
Although the three BBC contractors lost their courts,
judges acknowledged that they were victims of the national broadcaster
contractual requirements, and were not actually inherent tax evaders.
As reported by ContractorCalculator they issued a joint statement addressing the ruling.
"We are both happy and relieved to say that
The Board has also found that we acted in good faith and rejected HMRC's claims
that we – or our accountants – were careless about our tax case in any way, "
so they. “As a result, the Tribunal ruled that HMRC could not pursue its tax
requirements for a number of years. We are glad that ours
Accountants were also considered to have acted in good faith throughout. Give someone
of these findings, we consult with legal advisers to do so
" We have endured eight years of HMRC investigation and
any decisions to reach this point about what is obviously difficult and
obscure theme even for judges. It has been a depressing and stressful period
for each of us. However, we are grateful that the judgment in its entirety,
shows that we have acted in good faith throughout. ”
What can contractors affected by IR35 do to protect
Matt Tyler, former Qdos payroll specialist and Larsen Howie IR35 Consultancy Manager, encourages contractors to make sure they take into account their contracts and working methods.
"The result, although unfortunate for the presenters, really shows the importance of ensuring due diligence is done," he says. “Carelessness in dealing with IR35 and HMRC if an interrogation questioned can be quite costly for any party caught in the process. This will only be more important with the changes coming to the private sector in April as end customers and fee-paying entities will be on the hook for commitments. "
If you want some peace of mind, we offer a  full contract
Review among other services to help you prepare for IR35. We will
Give a pass or fail based on the current contract you have, along with
comprehensive comments on how to improve any problem areas. We also offer IR35
investigative representation from our tax manager and resident IR35
Vessey ATT should go to the board.
For further information or advice, call us on 01163 800 400 or send us a email . Alternatively, take a look around our Knowledge Hub for more IR35 advice, industry news and entrepreneur guides.