This is likely to be the highest-profile IR35 investigation to date, and the This Morning host believes if HMRC wins the case, the taxman will then go after a number of other ITV presenters, such as Ant and Dec, Phillip Schofield and Holly Willoughby.
He also reiterated his contractor status, arguing ‘there is nobody more freelance than me.’
BBC presenters have already been under investigations as the taxman cracked down on public sector workers operating through limited companies. HMRC has just concluded a consultation on extending the controversial rules to the private sector.
The contractor community reacted to Mr Holmes' investigation by urging caution and asking HMRC not to take a blanket approach to all freelancers.
Qdos - 'learn from mistakes'
IR35 specialist, Qdos Contractor, has urged the taxman to assess the case objectively and learn from mistakes made when pursuing BBC presenters earlier this year.
Qdos Contractor CEO, Seb Maley, said: “Only recently, the taxman pursued BBC presenters working through their own personal service companies, and now it seems as though HMRC has ITV presenters in its sights. The question - ‘who next?’ - springs to mind.
“While the details of Mr Holmes’ contract have not yet been disclosed, it’s important HMRC learns from the apparent mistakes it made when investigating BBC presenters earlier this year, given it was reportedly the broadcaster that encouraged these workers into operating through their own limited company and it was not necessarily the individual’s choice.
“It’s vital HMRC goes about this case and others in the right way, and assesses the unique aspects of Mr Holmes’ and any other presenters’ working arrangement. The taxman cannot simply assume that one presenter’s status sets a precedent for every contractor engaged by ITV.
“Given HMRC’s unpredictable nature, it’s increasingly important that freelance presenters and all other contractors for that matter are confident of their IR35 status, and can put forward a strong argument that they are genuinely in business on their own account.”
FCSA - 'Blanket fashion'
The Freelancer and Contractor Services Association (FCSA) reminded the Government that freelancing is a legimate way to operate.
Julia Kermode from FCSA said: "Eamonn Holmes is one more star working on a freelance basis who has hit the headlines and the story once again serves to highlight the complexity of IR35 legislation.
"Individuals choosing to be self-employed are in a very different position of security to someone who is a permanent employee with all the accompanying statutory rights and benefits. We dispute that personal service companies (PSCs) are a mechanism to avoid tax, they are a perfectly legitimate way of someone being in business on their own account which some people prefer to being a sole-trader because it separates business and personal liabilities.
"It is essential that HMRC does not penalise everyone working through PSCs in a blanket fashion as they bring much-needed flexibility to both the freelancer and businesses that engage them on a short-term basis, just as the Lords Select Committee stated in its report in 2014. Employment status is complex and Mr Holmes’ situation is further proof that the Government needs to address this outdated legislation as a matter of urgency.”
ContractorCalculator - 'witch hunt'
Contractor site, ContractorCalculator, pointed out the inconsistencies in the Revenue's approach and called on HMRC to stop 'harassing the self-employed with this ridiculous piece of legislation'.
Dave Chaplin from ContractorCalculator said: “Recent attacks on presenters are nothing short of a witch hunt and a misguided attempt to shore up the Treasury’s coffers by using outdated legislation. The Intermediaries Legislation, commonly called IR35, was created in April 2000 by HMRC to crackdown on the ideological invention by HMRC of ‘deemed employees’.
“The fact is that high paid freelancers who earn six figures now pay more tax by operating via a limited company than an employee on the same salary.
“The tax efficiency by hiring someone self-employed is actually obtained by the firm that hires them, in this case ITV, who would have avoided having to pay Employers National Insurance of 13.8 per cent on top of whatever monies were paid to Mr Holmes. To suggest that Holmes has avoided tax is pointing the finger in entirely the wrong direction.
“HMRC changed the rules for IR35 in the public sector from April 2017, and now if they find a ‘deemed employee’ the Employers National Insurance is paid by the firm hiring the contractor. If ITV was a public sector broadcaster and Holmes’s situation was under the IR35 microscope under the new rules, ITV would have a tax bill to pay, and Eamonn Holmes would probably end up with a tax refund.
"I sincerely hope that Holmes, and other presenters under HMRC’s spotlight win their cases, and then finally HMRC can stop harassing the self-employed with this ridiculous piece of legislation.”
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 2018