Presenter’s Arrangements with BBC Not Subject to IR35 Rules

In April we blogged about the upcoming reforms to the Tax framework - IR35.

Under current legislation, where an individual offers services through a PSC but in practice the relationship is akin to an employment one, the HMRC can treat them as an employee for tax purposes. Currently, in the public sector, the end user must determine the status and deduct tax accordingly. At present, in the private sector it is up to the PSC to determine the tax status. However, from April 2020 the rules for the public sector will be rolled out in the private sector and the below case is a useful reminder to companies who are considering their relationships with PSCs in preparation for the changes.

In the recent case of Atholl House Productions Ltd v HMRC a presenter successfully challenged a finding that she was an employee of the BBC for tax purposes.

The claimant worked for various outlets as a presenter including the BBC, Sky and ITV. This case concerned work provided to the BBC via the claimant’s PSC, Atholl House Productions Ltd, from 2015 to 2017. HMRC determined that for these tax years, the claimant’s arrangements with the BBC fell within IR35 and this decision was appealed to the First Tier Tribunal. The Tribunal has now overturned HMRC’s decision and confirmed that the arrangement was a contract for services.

The Tribunal did find some factors that suggested an employment relationship. In particular the written paperwork suggested that the BBC had control over the claimant’s time and the content of her work. Furthermore, the BBC would pay a fee to her if they could not provide her with a minimum level of work suggesting mutuality of obligations. However, when looking at the overall circumstances, the Tribunal found that the paperwork did not reflect the reality of what happened. Furthermore, the claimant was not entitled to holiday pay, sick pay or pension contributions. She was not subject to any formal reviews and controlled the content of the show when on air. In particular, the Tribunal noted that the claimant had worked as a freelance journalist for a number of other media outlets over an extensive number of years some of which were alongside her time at the BBC.

Though the changes to IR35 will not reach the private sector until next year, this case is an important reminder that companies need to ensure that the labelling of the relationship reflects the true reality of a situation.