HMRC has lost the long-running tax case involving the employment status of TV presenter, Kaye Adams. The decision was finalised following an Upper Tribunal, which stated that she was not an employee for the BBC and therefore IR35 rules do not apply.
The BBC required Adams’ services as a presenter on the Kaye Adams Programme, which was provided via her personal service company, Atholl House Production Limited. Over the course of this time, HMRC has disputed unpaid tax payments for tax years 2015/16 and 2016/17, for an estimated £140,000. However, Adams argued that her services were not exclusive to the BBC and she was able to take on contracts elsewhere. This helped in the ruling that Adams was within her rights to work for the BBC through her production company, as she was not an employee for the BBC.
HMRC is highly disappointed that the Upper Tribunal has decided that IR35 rules do not apply in this case. IR35 rules were first introduced in 2000 as an anti-tax-avoidance rule that applies to all contractors/freelancers who do not meet HMRC’s definition of being self-employed. The rules are intended to stop workers supplying their services through an intermediary, such as a personal service company, when they would otherwise be an employee, if not for the intermediary.
HMRC are said to be considering whether or not they want to appeal the decision. However, it has demonstrated the government’s determination to obtain a high profile victory as the IR35 reform nears.
New IR35 rules will take effect on 6th April 2021.