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UK – HMRC wins IR35 tribunal against BBC presenters

19 September 2019

HMRC has won an IR35 tribunal case at the High Court against three BBC presenters in a case that could have repercussions for contractors within the broadcasting industry.

With the exception of a few engagements, BBC presenters David Eaves, Tim Wilcox and Joanna Gosling were all deemed within scope of IR35 during a series of contracts with the BBC.

The trio were pursued for £920,000 in unpaid taxes as part of a crackdown on the use of personal service companies (PSCs).

Gosling, Eades and Willcox had argued that they were self-employed, however, the BBC presenters failed in their appeal.

According to The Telegraph, the judges found that the “imbalance of bargaining power” at the BBC was a significant factor in the case, saying: “The BBC were in a unique position and used it to force the presenters into contracting through personal service companies and to accept reductions in pay.”

The judgement was a split decision as two tribunal judges took opposing views over the IR35 status of the presenters. The cases were decided on the casting vote of Judge Harriet Morgan, who concluded that there was: “sufficient mutuality and at least a sufficient framework of control to place the assumed relationships between the BBC and the presenters in the employment field.”

The BBC said it has acknowledged responsibility for the contracts and said it will help to resolve the cases. Two-thirds of the bill is reported to have been settled already. 

Julia Kermode, Chief Executive of The Freelancer & Contractor Services Association, said, “We understand that the BBC advised their temporary workers to work through PSCs and now we are seeing the fallout.  I have some sympathy for the BBC presenters who did not get good advice and the cases illustrate that good advice on IR35 status is critical.  In the eyes of the current IR35 legislation, they are ultimately responsible for their own tax affairs, even if they were unfairly coerced into a certain arrangement.”

“Employment status is complex and this case is further proof that the Government cannot reasonably expect businesses to be responsible for determining the IR35 status of the contingent workforce that they engage,” Kermode said. “And yet this is precisely what the government will be doing when they extend the off-payroll reforms to the private sector next year.”

Qdos CEO Seb Maley also commented, ““It’s of real concern that at present, these individuals look like they will be made to pay vast sums to HMRC, despite the judges finding they were ‘forced’ into working as self-employed by the BBC. The onus should be on the engager to settle, not the presenters, who it's very difficult to label as guilty.

“With around 100 other BBC presenters in the same boat, we could see similar verdicts in time. However, each case needs to be examined on its own merit. And if it’s decided The BBC left someone with no choice but to work outside IR35, then these individuals must be helped financially,” Maley said.

Dave Chaplin, CEO of ContractorCalculator, also commented, “This should not be a story of well-paid presenters trading through companies to avoid tax but about the BBC and other broadcasters pressing hundreds of existing presenters to form companies because it continued to give the broadcaster the flexibility it desired whilst circumventing its own future tax risk by passing it to the presenters.”

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