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Radio presenter, Paul Hawksbee, had a First-Tier Tribunal (FTT) rule in his favour a year ago, after HMRC had argued that the arrangement between his limited company, Kickabout Productions Limited (KPL) and radio station, Talksport, was one of disguised employment and therefore fell into the IR35 provisions.
The original ruling was in favour of the presenter, who had argued that he was in business in his own right and not an employee of the station. HMRC argued that 90 per cent of his income in the past four years came from the Hawksbee and Jacobs Show show and made the case that this effectively made him Talksport's 'employee' and liable for Income Tax and National Insurance Contributions as an employee.
At the time, Judge Scott rejected HMRC's claims citing a number of factors which he decided made pointed away from the 'disguised employee' role. (See: Another high-profile IR35 defeat for HMRC - Shout99, July 2019)
HMRC appealed the decision to the Upper Tribunal (UT) who reconsidered the so-called hypothetical contracts between Mr Hawksbee and TalkSport and placed a different interpretation on the situation. The UT concluded ‘taking all of the relevant factors into account, we consider that viewed as a whole they are not inconsistent with the hypothetical contracts being contracts of employment.’
Mr Hawksbee now faces a tax bill reported to be in the region of Ł140,000.
Needless complexity
Tax specialists Qdos called it a 'rare win' for HMRC, but did not think that it was a 'clear cut' finding.
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“The fact that this case was by no means clear cut also goes to show how important it is that IR35 status is set with care and after careful consideration of the written contract and a review of the working practices. Contractors, along with hiring organisations and recruitment agencies, need to be acutely aware of this when deciding if the service provided reflects self-employment or employment.
“As concerning as this result is, it’s worth pointing out that Mr Hawksbee’s engagement - like many other presenters who have faced an IR35 investigation - is quite different from a typical contractor's. In our experience, the vast majority of contractors are genuine and belong outside IR35.”
Full UT judgment of the decision is here.
Further IR35 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 2020
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