Search

How can we help?

Icon

HMRC loses IR35 appeal in freelance journalist case

HMRC have lost their IR35 appeal against a ruling which found that the journalist and broadcaster, Kay Adams, was not in a ‘disguised employment relationship with the BBC when she was providing her services via her personal service company 

The Upper Tax Tribunal (UTT) in Commissioners for HMRC v Atholl House Productions Limited upheld the original decision that Ms Adams was ‘in business on her account’, meaning she fell outside the IR35 rules. The UTT reached their decision despite concluding that the contract met 2 out of the 3 classic tests of employment status set down in the lead case of Ready Mixed Concrete The UTT made the following observations: 

Mutuality of obligation  

The UTT agreed that the requirement for mutuality of obligation was satisfied – the presenter was required to present 160 programmes and was obliged to be paid £155,000 for doing so. 

Control  

The UTT confirmed the focus should be on whether the BBC had the right to control the presenter. It found that the BBC had the right to schedule the programmes as it chose, determine the form and content (though this was rarely exercised) and a qualified right to first call over the presenter’s time (subject to her other engagements), and so this test was satisfied.

Other factors in IR35 appeal 

Despite the above, the UTT found the presenter was not an employee because the agreement did not satisfy the third test in Ready Mixed Concrete  it held that other factors were inconsistent with a “contract of service”. 

In particular, the UTT considered her history as a freelance broadcaster and found there were no relevant differences between the work the presenter carried out for the BBC, and the work she had carried out previously as a self-employed broadcaster. They also noted that HMRC had agreed that in previous tax years, the presenter had fallen outside IR35. 

It also found that the degree of economic dependency the presenter had on the BBC (it accounted for 50 – 70% of her income and a large amount of her time) was not inconsistent with the presenter being in business on her own account – the UTT held she had simply found a stable and substantial revenue stream. It did, however, comment that had the income from her other work diminished, the economic dependency would have pointed more towards employment. 

Caroline Lendrum

Associate

View profile

+44 118 960 4669

This highlights the need for Status Determination Statements (SDS) to be completed by people who are very familiar with the relationship between the contractor and its client.

Key lessons  

The case turned on the impact of the other factors  the UTT noted had it simply relied on mutuality of obligation and control, the presenter would have been classed as an employee and therefore inside IR35. It is therefore crucial that all aspects of a contractor’s relationship with an end-user client are considered when determining whether they are inside or outside IR35. 

It also highlights the need for Status Determination Statements (SDS) to be completed by people who are very familiar with the relationship between the contractor and its client. This is both to comply with the duty to take all reasonable care when drafting an SDS, but also to give the client the best chance of the correct result and avoid challenges by contractors 

If you would like further assistance on the many challenging issues around IR35, ?please contact our employment lawyers. 

About this article

Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full General Notices on our website.

Caroline Lendrum

Associate

View profile

+44 118 960 4669

About this article

Read, listen and watch our latest insights

art
  • 01 June 2023
  • Employment

Facts employees should know about their personal data

We previously published an article on facts an employer should know about holding personal data, so it is only fair that we also write about the other side of the coin – facts employees should know as individuals whose personal data is held by their employer.

art
  • 01 June 2023
  • Immigration

What is the Immigration Skills Charge (ISC) and how much do you have to pay?

The Immigration Skills Charge (ISC) is a levy on companies who sponsor migrant workers. This levy was imposed on 6 April 2017. The Government states that the charge has been levied to contribute towards addressing the skills gap in the local economy.

art
  • 26 May 2023
  • Employment

Avoiding discrimination in flexible working requests

The right to request flexible working is currently available to employees with at least 26 weeks’ service and is set to be extended further under new Government reforms.

art
  • 25 May 2023
  • Corporate and M&A

Management Buyout – Top 5 things to consider

A management buyout is a financial transaction in which a member of the management team purchases the company from its registered owner. MBO’s usually occur in private companies in an effort to enhance profitability and simplify strategies.

art
  • 25 May 2023
  • Employment

Carer’s Leave Bill set to become law

On 19 May 2023, the Carer’s Leave Bill had its third reading in the House of Lords, and upon receiving Royal Assent, will become law. There is not yet a date for the implementation of this bill, however it is likely that this will happen relatively quickly upon receiving Royal Assent, so is definitely one to keep an eye on.

art
  • 18 May 2023
  • Immigration

Navigating SOC Codes

When it comes to UK immigration, understanding the intricacies of the system is vital. One significant aspect of the process revolves around Standard Occupational Classification (SOC) codes. SOC codes play a crucial role in determining the eligibility for an individual to apply for a work visa, assessing skill levels, and matching individuals to appropriate job roles.