TV presenter loses IR35 tribunal appeal

The Upper Tribunal has rejected an appeal from television presenter Christa Ackroyd against an IR35 tribunal ruling made earlier this year.

In February, HM Revenue & Customs won its case against the former BBC Look North presenter at tribunal.

Commenting on the ruling, Dave Chaplin, CEO and founder of contracting authority ContractorCalculator, said he had a lot of sympathy for Ackroyd and other presenters who have come under HMRC’s scrutiny lately, especially in light of the BBC admitting they forced presenters to use limited companies.
 
“Ackroyd would be right to feel aggrieved, too. When the BBC approached and poached her from the ITV Calender programme, she was previously in solid employment with an attractive salary and benefits. None of these were available to her when she worked with the BBC, because the only option she was given was to work via a limited company, which the BBC reassured her in 2012 was OK. She’s now facing an extra tax bill of around £200,000,” he said.
 
“What’s really frustrating about these cases is that they are based on the pre-reformed Off-Payroll rules. This means that the freelancer – in this case Ackroyd – is deemed liable for employer’s National Insurance, which under the Off-Payroll rules would rightfully be paid by the BBC. Had Ackroyd’s status been assessed under these the new rules, she would not have an extra tax bill, and it would be the BBC picking up the bill for the perceived avoidance of the employment taxes.
 
“The whole thing is a complete mess, all created by HMRC and the Treasury, and waved through Parliament by MPs, most of whom haven’t even bothered to read the small print and consider the impact,” he said.
 
“And in April, the Chancellor is planning to roll out this calamity to the private sector, and in the process significantly damage the flexible workforce.”

Also commenting, Julia Kermode, CEO of the Freelancer & Contractor Services Association, a professional membership body for umbrella employers and accountancy service providers, said: “The debate over how media stars who work on a freelance basis has once again hit the headlines as Christa Ackroyd has lost her appeal.  

“It is a debate that has been running for some years, but overlooks the many genuine self-employed freelancers and contractors who have chosen to work for themselves in line with current and correct tax legislation. It is another example that highlights just how complex employment status is, and is further evidence that the government cannot expect businesses in the private sector to be held responsible for assessing the IR35 status of those freelancers and contractors they engage. However, this is precisely what the government is planning to do when it extends the new Off-Payroll reforms to the private sector next year,” she said.

“HMRC cannot run rough-shod over the freelance sector, penalise everyone working through limited companies in blanket fashion, and assume that all these individuals are tax avoiders.  These are the very individuals who bring much needed flexibility to the businesses that engage them on a short-term basis. In times of economic uncertainty – which our country is facing right now – firms need that flexible option.”

For their part, an HMRC spokesperson said it welcomed the judgement that the presenter is within the intermediary rules.

"HMRC has won the majority of tribunal decisions involving television presenters.

“Employment status is never a matter of choice; it is always dictated by the facts and when the wrong tax is being paid we put things right.

“It is right that an individual who works through a company, but would have been an employee if they were taken on directly, pays broadly the same amount of tax and National Insurance contributions as employees.”

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