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BBC Presenter's IR35 Appeal Dismissed

BBC Presenter’s IR35 Appeal Dismissed

The Upper Tribunal have dismissed the appeal of former BBC Look North presenter Christa Ackroyd. Ms Ackroyd was looking to overturn the previous decision of a First Tier Tribunal in February 2018, which ruled that she owed nearly £420,000 in outstanding tax.

The former Look North presenter’s case concerned the tax years 2006/07 to 2012/13, when she was engaged by the BBC via her limited company, Christa Ackroyd Media. She took professional advice in relation to her contractual arrangements with the BBC, who obliged her to work through a personal service company.

Ms Ackroyd claims the unpaid figure is approximately £207,000, since under the reformed IR35 rules, employers’ NICs would rightly be paid by the BBC. Under the new reforms, it would also be the BBC who would be pursued by HMRC for perceived tax avoidance. However, Ackroyd’s case, like those of the other BBC presenters pursued by HMRC for unpaid tax, relates to pre-reform rules, and therefore the First Tier Tribunal’s ruling was upheld.

Ackroyd’s employment tax status was largely determined by the test of ‘control’, which looked at her daily working practices over the period of the contract in great detail. In his First Tier Tribunal ruling, Judge Jonathan Cannan said: “In our view the most significant factors in the present case include the fact that the BBC could control what work Ms Ackroyd did pursuant to the hypothetical contract. It was a seven-year contract for what was effectively a full-time job.”

Ackroyd’s representatives argued that while the BBC may have controlled her ‘output’, it did not control her ‘input’, which they claimed was the relevant factor in determining employment control. However, this was rejected by the Upper Tribunal, as this differentiation has not previously been made. It’s likely that a more detailed definition of control may be arrived at as case law evolves.

The individual circumstances of each assignment are becoming increasingly relevant in reaching an employment status determination. This highlights the complex nature of determinations and the various factors that must be taken into consideration. With this in mind, industry spokespeople for the contracting sector are making the point that it is unfair to make businesses responsible for making IR35 status determinations.

From next April, the organisation engaging the contractor’s services will become responsible for assessing the IR35 status of the assignment. This has seen many 100 FTSE businesses adopt a ‘PAYE only’ policy, meaning that limited company contractors must go on their permanent payroll, join an umbrella company or forgo future contracts.

This is a temporary policy that sees businesses attempting to mitigate risk in the absence of further guidance from HMRC. However, limited company contractors could find their options severely limited in this interim period. Subsequently, many are turning to umbrella companies as a safe contingency measure that automatically removes the risk of IR35 by deducting tax and NICs at source.

If you’ve been affected by the Off-Payroll reforms, or if you’re unsure about your employment status, Contracting Scout has a range of options to help you. To talk to a member of our team, call: 0203 603 1878

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