TV star wins tax dispute

TV star loses long-running tax dispute
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Peninsula Team, Peninsula Team

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HMRC has lost a long-running tax dispute with Loose Women TV presenter Kaye Adams over her self-employed status with a ruling that she was not hired under IR35 rules

In the latest hearing over a disputed tax bill for £124,000 for Adam’s personal service company, Atholl House Productions Limited, the First Tier Tribunal ruled that she was hired on a self-employed basis under a contract of service which did not fall under IR35 rules.

The case centred around whether her contracts had been directly between the BBC as the end user and the individual, which HMRC argued were contracts of employment. This case has been running since 2019 and followed an earlier decision and appeals to the Upper Tribunal and the Court of Appeal.

If IR35 had applied to those arrangements, then Adams would have been liable to pay income tax under the PAYE system and national insurance contributions for the earnings under those contracts as if she had been employed by the BBC.

HMRC opened an initial inquiry related to the four tax years ending 5 April 2014 to 5 April 2017 but dropped two years. Atholl House disputed the tax claims for two years from 2015 to 2017. The total tax due, in HMRC’s view, was income tax of £81,150.60 and national insurance contributions of £43,290.98.

At the latest tribunal hearing, the appellant’s barrister Keith Gordon argued that ‘Ms Adams’ uncontested evidence at the original hearing was that: (a) on average over the two tax years in question, between 50% and 70% of her gross income came from the BBC and the rest came from other sources; and (b) she estimated that her work for the BBC over the two tax years in question amounted on average to approximately 40% to 50% of her overall working time’.

HMRC hired a legal team of three to fight the appeal. On the employment issue, Adam Tolley KC said: ‘Given the significant time commitment required for the making of each show and the fact that it was known that Ms Adams wanted to spend time looking after her parents, Ms Adams’s estimate looked like an under-estimate’.

In response, the tribunal said: ‘We are inclined to accept that, despite the expected impact on Ms Adams’s overall working time of her caring responsibilities, it would have been known or reasonably available to each of the relevant individuals at the time when each written agreement was executed that, over the course of the relevant written agreement, roughly half of Ms Adams’s working time was going to be spent on her engagement for the BBC.’

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In determining the decision, Judge Beare said: ‘Whilst a long relationship can in certain cases be indicative of employment, it is perfectly possible for a worker to retain the status of self-employment over many years if the other features of the relationship point in that direction.

‘Adams had been engaged by many organisations other than the BBC and spent a meaningful percentage of her working time on those other engagements, the length of her engagement by the BBC is, in our view, not a particularly strong indicator of employment in this case.’

In summing up their decision to allow the appeal, Beare ruled: ‘We have concluded that, on balance, the terms of the hypothetical contracts and the circumstances in which the hypothetical contracts arose point toward a conclusion of self employment.’

 In a statement to ContractorCalculator, Kaye Adams said: ‘I am delighted that the First Tier Tribunal has confirmed my self-employed status for the third time, but there is no jubilation for me in this result.

‘Over the nine years of this investigation, the mental stress has been close to unbearable at times, and the legal costs I have incurred far outweigh the tax at stake.

‘I accept that HMRC has a duty to ensure that everyone pays the correct tax, and I wholeheartedly support it in that endeavour. To that end, I have fully cooperated with this inquiry for nearly a decade. However, this is the third court which has concluded that I am a self-employed individual, and HMRC has not once proven otherwise.’

Dave Chaplin, CEO of IR35 tax advisory firm IR35 Shield, who has been supporting Adams on her case since January 2019, said: ‘In my view, it was never in doubt that Ms Adams operated in business on her own account and was not an employee of the BBC. Multiple judges have told HMRC in multiple hearings that they are wrong, which should hopefully now be the end of the matter.’

For information on self-employment and how it interacts with health and safety law, visit BrAInbox today where you can find answers to questions like Do I have to have a first aider at work?

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