Loose Women and BBC presenter Kaye Adams has successfully appealed a £124,000 tax bill from HM Revenue & Customs (HMRC).
Ms Adams’ Limited company, Atholl House Productions Limited, received notice that HMRC had conducted an inquiry into her involvement with BBC Radio Scotland between March 2015 to April 2017. Consequently, HMRC formed the opinion that her engagement with the BBC would fall within the scope of IR35. Unsurprisingly, Ms Adams appealed this decision on the basis that she was a ‘freelance journalist’ who had never held herself to be part of the BBC and was ‘in business on her own account’.
Judge Beare acknowledged the need to consider the employment status assessment laid down by MacKenna J in Ready Mixed Concrete (1967). As such, Judge Beare assessed whether mutuality of obligations was owed between the parties; if Ms Adams was obliged to provide a personal service to the BBC; whether the BBC had control over Ms Adams; and whether there were any further factors which evidenced an employer and employee relationship. In determining this, Judge Beare recognised the precedent laid down by Autoclenz (2011) and how the tribunal must consider the realities of the relationship rather than the terms expressed in the written contract.
In considering mutuality of obligation, Judge Beare identified that the BBC was obliged to provide a minimum fee to Ms Adams’ Limited company regardless of whether she had provided services. Furthermore, Judge Beare acknowledged that Ms Adams had no right to provide a substitute and if unable to provide services, the BBC would search for another presenter at their own cost. Based on these factors, Judge Beare asserted that mutuality of obligations was present between the BBC and Ms Adams.
Turning to control, Judge Beare recognised that the BBC had a ‘light touch’ of control over Ms Adams as the editorial team had the ultimate responsibility over the content which was broadcasted. However, it was accepted that in reality the editorial team were unlikely to exercise this level of control over Ms Adams and therefore this ‘position was extremely unlikely to arise’. The BBC valued Ms Adams’ opinion on what was to be broadcasted and had complete trust that Ms Adams had extensive knowledge of, and would adhere to, the BBC guidelines on broadcasting, due to the length of her professional career. In addition to this, Ms Adams claimed to have total control over which calls to take, what questions to ask and what direction the programme should follow. Away from this, Judge Beare also underlined that the BBC did not have any control over Ms Adams’ other engagements and did not have ‘first call’ over her services. Whilst the BBC did hold some degree of control over Ms Adams, Judge Beare believed this control was not to be considered significant and that in reality ‘it is perfectly natural for an organisation … to ensure … the contractor … does not do anything which might cause harm to the organisation.’
Furthermore, Judge Beare put considerable emphasis on other factors surrounding Ms Adams’ involvement with the broadcaster. Judge Beare recognised that Ms Adams had over 20 years’ experience as a freelance journalist, who had continuously provided services to other media corporations and invested substantial funds into her own social media platform. In addition to this, this engagement only amounted to 50% of Ms Adams’ yearly income and therefore had other significant sources of income. Therefore, Judge Beare put great weight on Ms Adams’ professional career and the fact that her services were not exclusive to the BBC. Alongside this, Judge Beare acknowledged that Ms Adams did not receive any holiday or sick pay, she was responsible for providing her own clothing and that the parties had intended the agreement to be treated as self-employed.
In making his determination, Judge Beare expressed the importance of adopting a stand back approach and to consider the overall picture of the engagement. In doing this, Judge Beare concluded that the assignment should be treated as a contract for services and that there was no employer and employee relationship between BBC and Ms Adams.
This judgement comes weeks after HMRC’s defeat to Lorraine Kelly and is yet again another setback for HMRC. Although, HMRC previously succeeded in demonstrating that presenter Christa Ackroyd was a disguised employee (which is likely to be appealed), it is apparent from this judgement and the decision involving Lorraine Kelly, that being a television or radio presenter does not automatically result in an individual falling inside IR35.
This decision reaffirms the approach that the court will not apply a checklist to employment status but rather, focus on the overall picture of the relationship between the parties. Whilst the court place great emphasis on the limbs of control and mutuality of obligation, the court have also recognised the significance of the exclusivity of the arrangement and the professional career of the individual. Assessing an individual’s employment status is complex and there is certainly no silver bullet when determining IR35 status.