On 17 September 2019, the First-tier Tribunal11 held12 that the so-called ‘IR35’ rules applied to successive contracts entered into by the BBC and personal services companies (PSCs) formed by three presenters.
Each presenter was at all relevant times the sole shareholder and a director of the PSC that he or she set up. The contracts that were the subject of the dispute spanned periods from 2006/7 to 2013/413.
The Tribunal held that the actual contractual terms between the relevant PSC and the BBC provided the best evidence as to what a direct, notional contract between the BBC and the relevant presenter would have looked like. For the purposes of the IR35 analysis, the Tribunal therefore focused on the terms of the actual (PSC-BBC) contracts as though they were the terms of the notional (presenter-BBC) contract.
The issue under consideration was, essentially, whether these notional contracts met the minimum requirements for there to be an employment relationship for IR35 purposes. In a lengthy judgment, the Tribunal looked at the contracts between the BBC and each of the 3 PSCs, in light of the tests of (i) mutuality of obligation and (ii) control.
The Tribunal held that the fact that the actual contracts provided that (i) the presenters were obliged to be available on a ‘first-call basis’, and (ii) the BBC was obligated to provide to the presenters and to pay them, for a minimum number of days’ work, meant that there was a mutuality of obligation.
As for the control test, the Tribunal placed weight on the facts that (i) the BBC required the presenters to attend meetings, training and appraisals, (ii) the presenters were contractually obliged to adhere to the BBC’s editorial guidelines, (iii) ultimate editorial control remained with the BBC, and (iv) the presenters were restricted from working for other organisations.
It was also considered by the Tribunal that the contracts contained no meaningful right of substitution.
The decision can be viewed here.
