Loose Women presenter wins IR35 case

Media star Kaye Adams, the presenter of ITV’s Loose Women programme, is the latest celebrity to win an IR35 challenge, with a First Tier Tribunal (FTT) finding the terms of her personal services contract (PSC) for BBC radio shows meant she was not an employee and did not have to pay some £125,000 of PAYE and National Insurance contributions (NICs), reports Pat Sweet

The tribunal heard that Adams performs services for the BBC and other media organisations via her PSC, Atholl House Productions. HMRC was seeking to challenge her tax assessment for two years, during which time she had a daily morning programme on BBC Radio Scotland, claiming she was not self-employed as she said.

HMRC was seeking payment of £43,636 in PAYE and £22,744 in NICs for the tax year ending 5 April 2016, and £37,514 PAYE and £20,546 NICs for the tax year ending 5 April 2017.

The tribunal said the essential issue was whether or not if the services supplied by Adams to the BBC had been supplied under a contract directly between the presenter and the BBC, Adams would have been regarded for income tax purposes as an employee of the BBC.

Much of the argument centred on whether the contract as written matched what happened in actual practice, with regards to such issues as Adam’s ability to provide a substitute if she was not available, mutuality of obligation, and control. 

The judges said that in the current age of flexible working, when employees frequently work from home, using their own equipment, the fact that a putative employee fulfils the terms of the agreement by working from home and using his or her own computer is not as potent a contraindicator of employment status as it once was.

Similarly, whilst requiring the putative employee to wear a uniform would be consistent with employment status, the contrary cannot be said to indicate very much, as many employees wear their own clothes to work.

However, the judges were clear that the same cannot be said about holiday and sick pay, maternity leave and an entitlement to a pension. These are all common features of an employment contract and therefore their absence from a contract would generally be regarded as being inconsistent with the conclusion that the contract is a contract of service.

The tribunal heard evidence from Adams who made a number of points to counter claims that she had employed status.  These included not being paid when she missed shows on account of family responsibilities; being suspended for three weeks and receiving no fees in that period when the BBC deemed a tweet sent from her personal Twitter account breached standards; and that whilst on air, she would have ultimate control over which callers to take, what questions to ask and what direction the show should follow although other members of the team would make suggestions.

Kaye also told the tribunal that she was keen to establish her ‘brand’, particularly with regard to Loose Women, and would reduce her BBC commitments if she felt the alternative would do this. The BBC placed no restrictions on her ability to work for other broadcasters.

The tribunal found in Kaye’s favour. In doing so, the judge indicated a number of significant differences between her case and that of the BBC presenter Christa Ackroyd, who was deemed to be an employee in a similar FTT case, even though she worked via a PSC.

These were that the contract between the BBC and Ackroyd’s service company was seven years’ long and it followed a contract which was five years’ long. In contrast, each contract in Adams’ case was for approximately one year.

Secondly, the ratio of Ackroyd’s non-BBC income to her BBC income was materially different, as almost all (between 96% and 98%) derived from the BBC, whereas Kaye had a number of other sources of income. Ackroyd also had a clothing allowance and the BBC had first call on her time, she attended BBC training sessions, and the BBC could tell her whom she was interviewing. None of these features was present in the relationship between the BBC and Adams. Finally, Ackroyd was required to obtain the consent of the BBC for her non-BBC engagements whereas, in practice, this was not the case with Adams. 

Andy Chamberlain, deputy director of policy for industry group IPSE (the Association of Independent Professionals and the Self-Employed) said Adam’s win at the tribunal was  ‘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?’ Chamberlain said.

Dave Chaplin, CEO of Contractor Calculator said: ‘In this case, the importance of considering the bigger picture was reaffirmed, as the many engagements that Adams carried out alongside her BBC work proved critical to the outcome. 

‘All her roles were clear indicators that Adams was largely in control of her work.  The BBC certainly had ultimate right of control over the content that was created, but not over how the content was created.

‘In his evidence, I heard a BBC witness say that “Kaye calls the shots”; she would draft the scripts for the programme, decide which callers to take, what questions to ask, and the direction that the show would follow.  All of these things were up to Adams’ discretion while the show was being aired.

‘This judgment reaffirms the importance of looking beyond the contract and examining things holistically, including all the details pertaining to the individual.’

Atholl House Productions Ltd and HMRC, [2019] UKFTT 0242, TC07088

Report by Pat Sweet

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