Radio presenter Kaye Adams has won her IR35 case at the Upper Tribunal as judges rule that the BBC was not required to treat her as a PAYE employee
This is the latest stage in a long-running tax case concerning the employment status of a BBC presenter, Kaye Adams, who provided her services via her personal services company, Atholl House Productions Limited. HMRC was disputing outstanding tax payments of an estimated £140,000 for tax years 2015/16 and 2016/17, when Adams had a long-running contract with the BBC to present a radio show.
The production company was required to provide the services of Adams as presenter of the Kaye Adams Programme for a minimum commitment of 160 programmes during the period governed by each agreement, generally rolling one-year contracts, in return for a minimum fee of £155,000.
If the BBC required Adams’s services for more than 160 programmes, her company would be paid the additional rate of £968.75 per programme. Her services were not exclusive to the BBC and the presenter was able to take on other contracts.
The issues of control and mutuality were also central to the ruling. But the Upper Tribunal almost wholly agreed with the views of the First Tier Tribunal on mutuality.
Both parties agreed that, if a person is “in business on their own account”, to quote the phrase used in Hall v Lorimer  1 WLR 209, that may supply a reason why, at the third Ready Mixed Concrete stage, a contract is not one of employment even though it provides for a sufficient framework of mutuality and control.
The FTT decided that there was sufficient mutuality of obligation to satisfy the first Ready Mixed Concrete stage.
While establishing the nature of Adams’ work, part of the judgment focused on whether Adams also conducted other freelance work.
HMRC argued that the FTT’s conclusion was flawed because the FTT did not have evidence to determine whether Ms Adams had been self-employed over her 20-year career.
The Upper Tribunal refused to accept that, stating that ‘in her second witness statement, Ms Adams said that she had worked as a freelance for the majority of her career. She gave details of other work she had done. This included co-presenting the ITV show “Loose Women” for which, on her evidence, she was paid on a “show by show” basis’.
She explained what she regarded as the “ebb and flow of a freelance presenter’s role”, the uncertainty of the industry she worked in and the fact that roles could come to an end without notice. That evidence was entirely consistent with a conclusion that Adams’ other work was undertaken as an independent contractor, the Upper Tribunal agreed.
Under the agreement between Adams and the BBC, most importantly, the BBC had the right to determine the form and content of show. In practice, it was prepared to give Adams a high degree of autonomy so that she determined the content of the show and also the direction each episode would take while it was being broadcast.
The Upper Tribunal said ‘it was scarcely surprising that the BBC gave her that latitude as she was an expert with a proven track record of presenting popular and successful shows. However, provided that the show continued to answer to the description of “The Kaye Adams Show”, there was no constraint on the BBC’s right to determine the content or format of the show’.
The judges ruled in favour of Adams, accepting that she was within her rights to work for the BBC through her production company.
An HMRC spokesperson said: ‘HMRC is disappointed that the Upper Tribunal has decided that the intermediary rules, also known as IR35, do not apply in this case.
‘HMRC will carefully consider the outcome of the tribunal before deciding whether or not to appeal.’
Commenting on the verdict, Dave Chaplin, CEO of ContractorCalculator and IR35 Shield said: ‘This news could provide considerable comfort to other media-based freelancers. Kaye Adams was found to be providing personal service, mutual obligations were satisfied and there was a sufficient framework of control – but yet, she was found “outside IR35”, purely on the grounds that she was in business on her own account. HMRC’s contentious and flawed CEST tool would not agree.
‘The decision highlights a known flaw in the design of the new off-payroll legislation that is due to be rolled out to the private sector in April, namely, that a client won’t have all the information it needs to evaluate a freelancer’s status and will only be able to look at a partial picture. This means that many contractors who could be “outside IR35” because, like Ms Adams, they are in business on their own account, will be judged by clients as ‘inside IR35’ with no route to natural justice.
‘Whilst this ruling provides some certainty on the right way to assess by looking at the whole picture, when it comes to practicalities it has also thrown a massive spanner in the works.’