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Taxpayer wins IR35 challenge

Newsletter issue - May 2019.

HMRC have recently lost another high-profile IR35 case. Kaye Adams, the presenter of ITV's Loose Women programme, has successfully challenged HMRC on her employment status, with a First Tier Tribunal (FTT) finding the terms of her personal services contract for BBC radio shows meant she was not an employee.

In Atholl House Productions Ltd v HMRC [2019] UKFTT 0242, TC07088, the tribunal stated that the essential issue was whether, if the services supplied by the taxpayer to the BBC had been supplied under a contract directly between the presenter and the BBC, the taxpayer would have been regarded for income tax purposes as an employee of the BBC.

Much of the argument centred on whether the written contract matched what actually occurred in practice, with particular focus on the taxpayer's ability to provide a substitute if she was not available, mutuality of obligation, and control.

The FTT also made the following important observations:

'in the current age of flexible working, when employees frequently work from home, using their own equipment, the fact that a putative employee fulfils the terms of the agreement by working from home and using his or her own computer is not as potent a contra-indicator of employment status as it once was;

Similarly, whilst requiring the putative employee to wear a uniform would be consistent with employment status, the contrary cannot be said to indicate very much; as many employees wear their own clothes to work, the fact that a putative employee wears his or her own clothes when fulfilling the terms of an agreement cannot be said to indicate that the agreement is not an employment contract; and the same cannot be said about holiday and sick pay, maternity leave and an entitlement to a pension. These are all common features of an employment contract and therefore their absence from a contract would generally be regarded as being inconsistent with the conclusion that the contract is a contract of service.'

The tribunal heard evidence from the taxpayer, who made a number of points to counter claims that she had employed status. These included not being paid when she missed shows on account of family responsibilities; being suspended for three weeks and receiving no fees in that period; and that whilst on air, she would have ultimate control over which call to take, what questions to ask and what direction the show should follow.

The tribunal found in the taxpayer's favour. In doing so, the tribunal indicated a number of significant differences between her case and that of the BBC presenter Christa Ackroyd (Christa Ackroyd Media Ltd and the Commissioners for Her Majesty's Revenue and Customs, [2018] UKFTT 0069 TC06334), who was deemed to be an employee, even though she worked via a PSC. The differences included:

  • Length of contract - the contract between the BBC and Ms Ackroyd's service company was much longer than in the Adams' case, where each contract was for approximately one year.
  • Income level -the ratio of Ms Ackroyd's non-BBC income to her BBC income was materially different, as almost all (between 96% and 98%) derived from the BBC, whereas Ms Adams had a number of other sources of income.
  • Control -Ms Ackroyd was given a clothing allowance and the BBC had first call on her time, she attended BBC training sessions, and the BBC could tell her whom she was interviewing. None of these features was present in the relationship between the BBC and Adams. Ms Ackroyd was required to obtain the consent of the BBC for her non-BBC engagements whereas, in practice, this was not the case with Adams.

This case reaffirms the importance of looking beyond the contract and examining things holistically, including all the details pertaining to the individual.

Addlestone Office

Taxpayer wins IR35 challenge

Andrew has been working in accountancy practices since leaving school at 16 and has over 30 years of experience dealing with all aspects of small and medium size businesses, personal and corporate tax issues.

He has been a partner since 1995 and has a wide and varied general practice background.

Andrew has extensive knowledge of many areas of business, accountancy and tax and is able to draw on his experience and knowledge to give clients comprehensive advice on a wide range of matters.


Taxpayer wins IR35 challenge

Keith joined Turner Hampton in May 2001, as tax partner. He qualified with a medium sized provincial firm in 1994 before moving to the City to join a top six firm where he specialised in multi-national partnership tax.

He has a wealth of experience in dealing with small owner managed businesses through to larger national organisations and those with interests abroad.

Keith, currently oversees the personal tax and corporation tax compliance and planning strategies of taxation for our clients.


Taxpayer wins IR35 challenge

Marc joined the accountancy profession in 2006 and trained with a top 50 firm before qualifying in 2010. Marc joined Turner Hampton in the same year because he was excited about the challenge of taking on a more hands-on role with clients.

Marc’s focus is on helping individuals with their businesses – from sole trades to large corporates – and guiding them through the red tape that often comes with accounting. Marc enjoys helping clients spot opportunities that can contribute to their businesses being successful, and assisting them with the real nitty-gritty, without losing the overview. Marc gets the biggest pleasure from his work when he is able to help clients save money or achieve something they may be striving towards.

Outside of work, Marc enjoys watching and playing all sports, listening to music, going to concerts and eating out.


Taxpayer wins IR35 challenge

Vaughn is an ACCA & AAT qualified accountant, Vaughn joined CSL in 2016 and believes his 17 years of experience has allowed him to gain a vast knowledge in dealing with all aspects of small businesses, personal tax and corporate tax issues.

Vaughn is a strong believer in building good client relationships. He feels that by understanding the specific needs of each client, he is able to offer more sound and efficient tax advice.

Outside of work Vaughn is a keen sportsman. If he isn’t enjoying time with his family, he can often be found walking many of Surrey’s local golf course fairways or attending sporting events.


Taxpayer wins IR35 challenge

Melanie joined CSL Partnership in April 2017 as a senior accountant. She is ACCA qualified with over 10 years experience working within practice. Melanie works with a wide range of clients and provides advice to owner-managed businesses and personal tax clients on accountancy and taxation matters.


Taxpayer wins IR35 challenge

Cindy joined CSL Partnership in 2007. She is an ACA qualified accountant with over 20 years of accountancy experience working within both practice and business.


Taxpayer wins IR35 challenge

Colin has worked in the accountancy profession for over 35 years during which he has gained a great deal of experience working on a diverse range of small and medium sized businesses along with sole trades and partnerships.

His areas of expertise lay within accounting, auditing, personal and business tax matters.

He is passionate about the role which small and medium sized businesses play in today’s market and how the accountancy profession can best serve their needs.


Taxpayer wins IR35 challenge

Carole has been a bookkeeper and payroll clerk for over 25 years and is qualified by experience. She has recently become involved in the process of auto enrolment for pensions. Over the years she has been self-employed but more recently employed in accountancy practices around the area.


Taxpayer wins IR35 challenge

Karen joined the practice in early 2019 as our Administrator/Receptionist and brings 15 years previous experience to the role. She ensures the office runs smoothly and efficiently providing back up and resources to the professional staff allowing them to focus on client matters. Karen is a very cheerful individual and always happy to help. In her spare time Karen enjoys spending time with her family.


Taxpayer wins IR35 challenge

Martin joined CSL Partnership in November 2019 returning to practice after spending the previous 8 years working in Industry. He is an AAT qualified accountant and has spent over 20 years working in the profession.

Martin works on all manner of clients from sole traders to large limited companies. He is an avid user of new software and technology to improve how he and clients work together and will always look to find a way to make life simpler for the client so they can focus on running the business rather than stressing over the accounts.


Taxpayer wins IR35 challenge

Ian joined Turner Hampton in 2016 and has worked in the accountancy profession for over 30 years.


Woking Office

Taxpayer wins IR35 challenge

Emma has worked in accountancy practices for over 20 years and qualified as a Chartered Certified Accountant in 2000. She has gained experience in all aspects of the accounting and auditing functions, developing exposure to a broad range of clients.

Emma advises owner-managed businesses and personal tax clients on accountancy and taxation matters. She has a particular expertise on systems review and implementation.

She has worked for CSL Partnership since it formed in 2001, becoming a director in 2005 and now manages the Woking office.


Taxpayer wins IR35 challenge

Philip has worked in various accountancy practices since the age of 19 and joined CSL Partnership in 1998 where he qualified in 2008.

He works with individuals, sole traders and limited company businesses to assist them with all their accounting and taxation requirements.


Taxpayer wins IR35 challenge

Andy has worked in accountancy since 2010 and joined CSL Partnership in April 2018. He has experience in a wide range of sectors, and has enjoyed working with individuals, sole traders and limited companies of varying sizes and needs. Outside of the office, you’ll find Andy on a hockey pitch or listening to music.


Taxpayer wins IR35 challenge

Lesley joined Turner Hampton in 2003, having previously worked both in accounts departments and in practice. She has been running client payrolls since joining the company and has gained many years of experience in payroll. Lesley now processes all aspects of payroll for both Turner Hampton and CSL Partnership clients.


Taxpayer wins IR35 challenge

Gail joined the firm in May 2018 and has worked in accountancy practices as a bookkeeper and payroll clerk since 2013. Historically, Gail has been self-employed and worked for companies in the financial and customer service sectors.

She is a full member of AAT. When not working, she enjoys hiking, mountain biking and yoga.


Taxpayer wins IR35 challenge

Marrieclaire is a bookkeeper, she processes payroll and maintains the accounting records to prepare VAT Returns and CIS Returns. Marrieclaire is a qualified Chartered Management Accountant with varied industry experience.


Taxpayer wins IR35 challenge

Elaine joined in June 2017. Prior to this she worked in a number of different industries including fast moving consumer goods and mechanical & electrical consultants.

She is a fellow member of AAT having completed the qualification in 1997.


Taxpayer wins IR35 challenge

Natasha joined CSL Partnership in October 2019, having worked in accountancy since 2017. Natasha has experience completing payrolls, bookkeeping, VAT returns & CIS returns. She is currently a trainee accountant, looking to become qualified in the coming years.


Taxpayer wins IR35 challenge

Wendy joined CSL in April 2019 as a Part-Time receptionist and administrator after 25 years working as an office manager in the design world. She is more than happy meeting and greeting clients and working with such a great team of people in the Woking Office. In her spare time Wendy enjoys tennis, yoga and pilates.


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