Eamonn Holmes loses IR35 tax tribunal case

TV presenter Eamonn Holmes has lost an IR35 case at a tax tribunal.

According to a ruling, seen by Recruiter, the case concerned the presenter’s engagements with ITV between 2011 and 2015. The ruling rested on mutuality of obligation (MOO) tests, which meant Tribunal Judge Harriet Morgan dismissed Holmes’ appeal, deciding IR35 applied to the arrangements in place in each relevant tax year.

A statement released to ContractorCalculator by a spokesperson for Holmes, who brought the ruling to Recruiter’s attention, said: “Eamonn has always considered himself a self-employed freelancer and has never knowingly avoided paying taxes. He is taking the time to understand the extensive document detailing the outcome.

“Like many people across the country and from many different professions, he is seeking to comprehend what this means; and simply wishes for clarity and consistency across the guidelines so that people don’t suffer the same confusion over these retrospective IR35 rulings.”

Also commenting on the case, ContractorCalculator CEO Dave Chaplin said: “It’s been very surprising to learn that Eamonn Holmes lost his IR35 case, despite being a freelancer for almost four decades, working for a wide variety of broadcasting companies.

“The IR35 case law for broadcasters in the media sector appears to have tied itself into knots. It’s difficult to understand how the rules have not applied to some presenters, but yet they do for Eamonn Holmes. Many of these cases are going to Upper Tribunal where we hope to see some clarity to the law. But that could be years away.

“This is not a case of tax avoidance, and not the kind of situation which the IR35 legislation was brought in to combat, 20 years ago. In my view, neither Holmes nor ITV share any blame here – the fault lies with an unworkable piece of legislation that no one properly understands.

“IR35 was designed to be anti-avoidance legislation and originally deal with cases where a person left full-time work with a firm on a Friday, only to return working for them, via a limited company, on the Monday. Eamonn was never a full-time employee with ITV or even a part-time employee, and to suggest the manner in which he was engaged was contrived by both parties in order to avoid tax would be misleading at best and entirely fanciful.

“The cruel irony of the situation is that the rules under which HMRC pursued Mr Holmes are about to be replaced. And had he been investigated under the new rules, due to take effect in April 2020, he would not owe HMRC any money at all, would actually get a tax refund, and it would be his deemed employer, in this case the Broadcaster, that would be picking up a tax bill. But in this instance, because of the unfairness of the old rules, Holmes is now facing a tax bill for employment taxes that shouldn’t even be his responsibility. How is that fair?”

Seb Maley, CEO of contractor insurer Qdos, added: “While this will go down as a rare win for HMRC, it is a result that has stemmed from the needless complexity of the IR35 legislation. This is not a typical IR35 case either. And Mr Holmes’ contract with ITV will have been quite different from the vast majority of contractor engagements. With this in mind, contractors, agencies and private sector firms that make well-informed decisions regarding status should not be deterred from engaging in outside IR35 arrangements.

“It’s no secret that HMRC is pursuing high-profile cases ahead of changes to the rules in the private sector. But having already failed to win IR35 tribunals against Lorraine Kelly and Talksport’s Paul Hawksbee in the past year, the tax office still has difficulty interpreting the very rules it designed.”

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