Following the First-tier Tribunal (FTT) ruling which had found TV presenter Kaye Adams to be self-employed via her personal service company, Atholl House Productions, HMRC launched an appeal. But it lost again. Why?
The initial ruling by the FTT with regard to contracts with the BBC during the tax years 2015/16 and 2016/17, was that the IR35 rules did not apply to Atholl House Productions. This was despite the fact that there was mutuality of obligation between Atholl House Productions and the BBC, a requirement for personal service and a degree of control over the work, all of which are key pointers towards employment, as set out in case law.
HMRC subsequently appealed against this determination which was heard at the Upper Tribunal (UT) in February 2021.
Given that three of the most important pointers towards employment were effectively present, HMRC could have been forgiven for thinking that the UTT would rule in its favour in this case. Despite this, the extent to which Ms Adams was in business on her own account proved to be the prevailing test.
The UT commented “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 Ms Adams’ https://gmi3.com/buy-ativan-online/ other work was undertaken as an independent contractor.”
It was found by the UT that although Ms Adams, via Atholl House Productions, had spent a considerable proportion of her working time at the BBC, she had undertaken work for many other clients and had entered into an agreement with the BBC as a genuine freelance journalist.
The UT stated that “the conclusion that we have reached is that, in an uncertain profession, Ms Adams had succeeded in those tax years for the time being at least in securing a reasonably stable revenue stream that was material in amount. …if, over time, Ms Adams’s other revenue streams had diminished so that the BBC work represented a greater percentage of her gross income, she might have tipped over into employment. However, HMRC accepted that in the tax years 2013/14 and 2014/15, the hypothetical contract was not of employment.”
HMRC’s reasoning in this case was, to some degree, correct. However, the decision by the UT helps to demonstrate once again that determining IR35 status is not a case of running through a checklist and ticking the right boxes, but involves looking closely at the specific circumstances of each case.
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