UK taxman wins tribunal case against BBC presenters

The Beeb may have forced you into it, but you still have to cough up

HMRC has won an IR35 tribunal against BBC journalists Joanna Gosling, David Eades and Tim Willcox.

That is despite an earlier High Court ruling finding the corporation had forced them into the wrong contracts. The presenters, through their personal service companies, could face a tax bill of tens of thousands of pounds in the UK. The trio are understood to have originally collectively faced a bill of £920k, some of which has been paid.

According to the first tier tribunal judgment, the presenters all told the judges "they had not heard of IR35 until it was mentioned to them by their accountants or when HMRC started their enquiries into their tax affairs".

The 178-page ruling, released on 17 September, which came down to a split decision resolved on a casting vote, found the presenters were liable to pay more tax under IR35 legislation.

It follows a number of defeats against HMRC around the controversial legislation. In April the taxman lost an IR35 case against Loose Women TV and radio broadcaster Kaye Adams. TV presenter Lorraine Kelly also won a ruling against HMRC over a £1.2m tax bill.

Dave Chaplin, CEO of Contractor Calculator, said: "I was surprised all three were caught within the IR35 legislation."

However, he added: "I don't think IT contractors working on projects outside IR35 have anything to worry about," suggesting that this was an unusual case.

The government is in the process of extending the controversial legislation to the private sector, which will come into force in April 2020.

From 6 April 2020, it will be the responsibility of all medium and large-sized private sector bodies to determine whether contractors fall within the IR35 legislation.

Benefits

If the off-payroll working rules apply, workers' fees will be subject to tax and National Insurance contributions but they will not receive other benefits of workers on the payroll, namely holiday or sick pay.

Qdos CEO Seb Maley said: "With further IR35 reform approaching, companies engaging contractors should take note. No firm should force individuals into a working arrangement purely for its own benefit. IR35 status must be assessed fairly. In doing so, situations like this will be avoided."

Andy Chamberlain, deputy director of policy at the Association of Independent Professionals and the Self-Employed, noted the split decision showed how confusing IR35 is already.

"We will look at the judgement in detail but the uncertainty in the decision is likely to add to the chaos around this legislation. Recently, HMRC has lost the majority of these cases. There is little evidence that they or other experienced tax specialists are confident in how it works."

Joe Tully, managing director at Brookson Legal, added: "This public sector example could well inform similar claims in the private sector if hirers do not take the time to properly prepare for the rule changes." ®

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