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IR35

Tribunal finds that the BBC runs a tight ship

The First-tier Tribunal (FTT) has found that three news anchors are caught by the IR35 rules. What are the details?

Case facts. BBC news presenters David Eades, Joanna Gosling and Tim Willcox appealed to the FTT when HMRC decided that the IR35 legislation applied to the arrangement between their personal service companies and the BBC.

Appeal.  The presenters appealed against HMRC’s decision on the basis that they agreed to be available to the BBC for a minimum number of days and could turn down assignments offered. They were only paid for the programmes they presented on, indicating self-employment. HMRC countered that the BBC was required to provide work to the presenters for a specified minimum number of days; if they chose not to, the fee was still payable. Furthermore, the presenters were not able to provide substitutes in their place, indicating an employment relationship.

Decision. The FTT reviewed the contracts and BBC culture extensively.  According to witnesses, the BBC was directing presenters to set up personal service companies and although the contracts may have changed over the years, their jobs did not. The tribunal found that, overall, there was an employment relationship. It found that there was mutuality of obligation because the presenters had to work for the BBC for a minimum number of days and if the BBC did not provide the work, the presenters were still paid the same fee. Furthermore, the presenters were obliged to personally provide services. The presenters were also required to undertake training and had informal appraisals, which is inconsistent with self-employment. The FTT also considered the degree of control held by the BBC and found that it dictated when, where and how the presenters worked at the BBC. The tribunal placed significance on restrictions imposed by the BBC; the presenters could not work for other broadcasters. The appeal was therefore dismissed. 

Tip. In this case the presenters had previously been employed by the BBC and then set up their own personal service companies. However, the IR35 legislation still applies where the individual is not an ex-employee, if by nature, the relationship is an employment one. Each case must be determined based on the facts, it is not possible to set boundaries in the terms of the contract alone.

The full transcript can be found here: http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j11337/TC07377.pdf.

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