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This comes a few weeks after HMRC suffered a similar embarrassing defeat when it tried to claim television presenter, Lorraine Kelly, was an ITV employee rather than a contractor. (See: Top TV presenter wins £1.2m IR35 battle with HMRC - Shout99, March 2019)
On this occasion, HMRC claimed that Kaye Adams was a BBC employee and not a freelancer – and therefore should be taxed under the IR35 regime. Ms Adams has presented a number of television and radio shows for the Corporation.
Her company, Atholl House Productions, brought an appeal against a tax and NIC bill of more than £120,000.
However, the First-Tier Tribunal ruled that Kaye Adams was a freelancer with roles outside the BBC, and did not have employee rights at the company.
This is another blow for HMRC and their controversial and much-maligned reforms to IR35.
IPSE - Disastrous change
Freelancer group, IPSE, warned that result shows that HMRC does not understand its own IR35 legislation.
Andy Chamberlain from IPSE said: “BBC and Loose Women star Kaye Adams’s victory is yet another example of HMRC’s complete failure to understand its own labyrinthine self-employed tax laws.
“This is the fifth of six IR35 cases HMRC has lost since it made its disastrous changes to IR35 in the public sector in 2017.
“This should be a loud warning bell to the Government not to extend the hugely damaging changes to IR35 to the private sector next April. When HMRC clearly cannot understand these tax laws, how can they possibly expect businesses across the UK to?
“The self-employed sector is one of the UK economy’s most valuable assets, contributing £275bn every year. Now of all times, the government must protect this dynamic and productive sector, not stifle it with tangled and ill-conceived regulations.”
Qdos – independent review
HMRC also came in for criticism for failing to understand its oen legislation from freelancer tax specialists Qdos.
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“How many more genuinely self-employed freelancers and contractors must needlessly endure an IR35 case before an independent review into HMRC is launched? You certainly start to wonder when and if HMRC will be held accountable.
“It is, of course, concerning that HMRC can’t seem to grasp the very legislation it designed and attempts to police. With further reform on the horizon, this case emphasises the importance of being confident in IR35 status, irrespective of whether you’re a contractor, an agency or end-client.”
Flawed
Umbrella trade body The Freelancer & Contractor Services Association argued that HMRC’s approach was ‘flawed’ as it failed to consider the whole picture.
Julia Kermode from FCSA said: “Once again we are seeing a high profile presenter coming under the spotlight and wrongly so. Kaye Adams is clearly a freelancer and has been working for a number of media outlets for the past 20 years – inarguably she is in business in her own right. HMRC pursued the case on the basis of editorial control that was contractually held by the BBC, although in practice Adams was in control of her own work.
“This case demonstrates that HMRC’s approach, fixating on just one element of IR35, is flawed and that the bigger picture of someone’s employment status must be considered as a whole in order to reach a definitive conclusion. The fact that HMRC continues to lose such cases surely demonstrates that it does not understand its own legislation.
“This is no comfort at all as businesses prepare for the Off-Payroll reforms to reach the private sector in April 2020, when companies will be required to assess the IR35 status of the freelancers and contractors they hire, something that HMRC’s “experts” themselves seem incapable of doing with any accuracy.”
For more information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
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Susie Hughes © Shout99 2019
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