This is the third tribunal decision relating to the services provided to Sky by journalists and commentators, and the latest in a long line of IR35 cases involving the working practices of freelancers in the media.
This latest case concerns Alan Parry, a well-known football commentator who has worked for Sky for many years. The appeal covered services provided via his company, Alan Parry Productions Limited for tax years 2013/14 to 2018/19.
Mr Parry contested that the contracts his limited company held with the broadcaster during this specified time reflected an employment relationship, rather than self-employment.
But due to the Judge taking the view that Mutuality of Obligation (MOO) existed between Parry and Sky, with the presenter also said to have worked under the control of the broadcaster, it was decided that the engagement belonged inside IR35.
It leaves Parry with a tax bill of £356,420.37, made up of £222,474.40 of Income Tax and £133,945.97 in National Insurance Contributions. Although Corporation Tax already paid by Parry will be offset from this amount. The presenter could also appeal again.
Seb Maley from freelancer tax investigator specialists said: "The sums alone in this case highlight the staggering cost of getting IR35 wrong. After Eamon Holmes, Gary Lineker, Lorraine Kelly and several others, Alan Parry is the latest in a long line of high-profile presenters caught up in IR35 cases with huge tax liabilities. It makes you wonder who HMRC will target next.
“Whichever way you look at it, the £356,000 tax bill handed to Parry is a firm reminder of the importance of IR35 compliance – something that contractors and businesses must prioritise.
“Digging into the details, it seems that the contracts held between Parry and Sky didn’t necessarily reflect the reality of the engagement, which HMRC will likely pay close attention to in the event of an IR35 investigation.”
Further IR35 information
For more information about all aspects of IR35, including the controversial IR35 reforms see Shout99's News on IR35 section.
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2022