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HMRC has faced another defeat after presenter Ms. Kaye Adams successfully appealed against a tax bill of £124k for her engagements with BBC between March 2015-2017. This is the fifth out of six cases HMRC has lost in a row since beginning of 2018, a clear evidence of the fact that HMRC does not have an understanding of its own tax legislation.

BBC Presenter Kaye Adams Wins Ir35 Case Against HMRC

Case Facts

Ms. Kaye Adams who was a presenter on ITV’S show named “Loose women” appealed against HMRC in relation to her self-employment status at the time of presenting BBC radio Scotland “The Kaye Adams Programme” during tax years 2015-16 & 2016-17. She writes regular column for various magazines and newspapers as well as appears on press preview on channel Sky news.

Ms. Kaye Adams received a bill of £124k from HMRC in which HMRC asked Kaye to pay £81k as income tax and £43k as national insurance contribution. HMRC claimed that she was an employee of BBC and owed around £124k to HMRC and bought this case under IR35 legislation. In response to HMRC, Ms. Kaye appealed against the tax authority by saying that she was not a BBC employee and worked as a freelancer.

On 16th April 2019, the first tier tribunal declared the judgement in the favour of TV presenter Kaye Adams and the following statements were made –

Also Read: How Contractor Found Relief From HMRC IR35 Case

HMRC’S Verdict

HMRC claimed that Kaye Adams was a BBC employee rather than a freelancer and therefore IR35 law should apply. HMRC’S barrister “Elisabeth Roxburgh” too made a statement that Ms. Kaye had an office at BBC which was eliminated by Judge “Tony Beare”. HMRC also said that their tool CEST (a tool used to identify IR35 rules will apply or not) has been thoroughly tested and provides the accurate answer if you are putting the right facts.

After losing the case, HMRC representative said “We are disappointed that the first tier tribunal has decided that the intermediary rules did not apply to this case. We will carefully consider the tribunal outcome before deciding to appeal further.

Statement By Ms. Kaye’s Lawyer

Ms. Kaye’s lawyer argued that the statement said by the tax authority that Ms. Kaye is a BBC employee and not a freelancer is absolutely incorrect as Kaye is a freelancer who is working in this field from last 20 years and never ever remains the employee of BBC in the past.

Statement By CEO, Founder Of Contractor Calculator “Dave Chaplin”

Dave Chaplin commented on the IR35 ruling and said that IR35 law was developed by HMRC in April 2000 to crack down on tax avoidance by “disguised employees”. Chaplin also said that HMRC gives much importance to the written contract and very little to the working practices. He also commented that HMRC has a belief that there are thousands of disguised employees but it was a fiction. The truth is that the tax authority is wrongly going after people in order to collect additional taxes from the individuals and providing them years of stress and uncertainty and even threatening their way of working and the livelihood. It clearly shows that HMRC has lack of understanding in relation to employment status.

Also Read: Lorraine Kelly IR35 Case Against HMRC

The Decision By Judge “Tony Beare”

The judge “Tony Beare” speaks and declared his judgement in the favour of Ms. Kaye’s Adams on the basis of the following points –

  • Tax tribunal said that Ms. Kaye cannot be considered as an employee as she is not entitled to any staff benefits like holiday, sick pay, maternity leave or a pension from BBC under each actual agreement.
  • Judge “Tony Beare” also agreed with Ms. Kaye’s lawyer that Ms. Kaye’s career of 20 years as a freelancer and roles outside BBC clearly shows that the broadcaster was in business on her own account.
  • Tony Beare also added that there are many features which are inconsistent with employer-employee relationship.
  • He also concluded that that the percentage of Ms. Kaye’s earnings is roughly 30% from other such engagements outside of her work with BBC. Hence, “it is possible that Ms. Kaye must have spent a meaningful part of her overall working time on those other engagements.

In this case Ms Kaye’s other engagements were key to the tribunal decision as BBC did not have the first call on her services. Further there lack was lack on control from BBC on the editorial content.

With Off-Payroll

This is the fifth case HMRC has lost since making the infamous changes to IR35 in public sector in 2017. Now, it is a warning bell for HMRC to not extend these rules in private sector in April-2020 as how are contactors as well as companies expected to understand legislation that even the lawmaker doesn’t understand and cannot implement properly.

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