Hot on the heels of the First-tier Tribunal’s decision in Albatel (the “Lorraine Kelly” case) two more IR35 decisions were handed down in April.

Firstly, in Big Bad Wolff Limited the Upper Tribunal upheld the First-tier’s decision that an actor who provided services through his personal services company was caught by IR35 for national insurance contributions (NICs) purposes (even though it was accepted that IR35 did not in this case impose an income tax charge). The Upper Tribunal held that the relevant NICs rules had the effect that the actor was deemed to be employed for NICs purposes. This was the case despite the fact that he was not considered to be an employee under general law purposes. The decision can be viewed here.

Secondly, in Atholl House the First-tier Tribunal held that IR35 did not apply in the case of another well-known presenter (this time Kaye Adams of Loose Women fame).

The appellant was Ms Adams’ personal service company (PSC). HMRC determined that Ms

Adams was a BBC employee for two tax years, primarily due to her work presenting a BBC Radio Scotland programme (running for three hours, each weekday morning). In addition to her BBC work, Ms Adams also appeared on ITV’s Loose Women and Sky’s Newspaper Review, wrote columns for a number of newspapers and magazines, hosted a number of corporate events and awards evenings and was a successful author.

The Tribunal considered whether, had Ms Adams’ services been supplied under a contract directly between herself and the BBC, she would be regarded as an “employee” of the BBC. This required a close consideration of the agreed contractual terms between the BBC and the PSC, together with a review as to what had happened in practice. In light of this the Tribunal found that:

  • Ms Adams did not receive any “typical” employment benefits such as sick or holiday pay
  • whilst on air, on her BBC Radio Scotland show, she had ultimate control as to which callers to take and which questions to ask. However the BBC had ultimate editorial control over the content of the programme
  • Ms Adams placed great importance on her “brand”, for example by building her own social media presence. This was “consistent” with a career as a freelance journalist for over 20 years
  • the BBC placed no restrictions on Ms Adams’ ability to work for other media outlets (she was free to accept any other engagements during the period of alleged “employment” with the BBC)
  • Ms Adams had no right of substitution
  • Ms Adams was most often recognised in public for her Loose Women appearances. For that reason her “professional identity is, if anything, linked more closely to Loose Women than it is to the BBC”
  • although there was some debate between the parties as to how Ms Adams’ professional work (in terms of both remuneration and time) could be split for the periods in question between her BBC and her non-BBC work, even on HMRC’s figures at least 30% of her income derived from non-BBC work. In any event, the Tribunal held that it would be “wholly artificial” just to look at the two tax years in question in isolation. It was, rather, necessary to consider her overall professional career. In taking that approach Ms Adams’ BBC work was considered to be even less significant

Balancing all of the above (and more) the Tribunal held that Ms Adams’ hypothetical contract with the BBC was not one of employment. Accordingly the IR35 rules did not apply.

Interestingly the Tribunal distinguished the facts of this case with those in Ackroyd. Crucially, in the Tribunal’s view, in Ackroyd (i) the BBC’s contract with the intermediary was for seven years, following one for five years, (ii) the non-BBC income was de minimis, (iii) Ms Ackyroyd was given a clothing allowance, (iv) the BBC had first call on Ms Ackroyd’s time, and (v) Ms Ackroyd was required to obtain the BBC’s consent for non-BBC engagements.

The decision can be viewed here.