Another day, another case about the tax status of a TV presenter. This time Kaye Adams, in Atholl House Productions Ltd v HMRC [2021] UKUT 0037 (TCC).
The Upper Tribunal concluded that if Ms Adams had been engaged directly by the BBC (instead of via her company) she would not have been an employee: so ‘IR35’ did not apply.
Much of the case, including the application of the usual ‘mutual obligation’ and ‘control’ tests is ‘same old, same old’: the tests are familiar, though their application to particular cases has been shown to be so much dependent on the weight given by different tribunals to what are often fine differences in facts as to make the cases of little value as precedents.
What is of far more interest is that although the Upper Tribunal held that the degree of control held by the BBC was enough to justify the prima facie conclusion that Ms Adams would have been an employee, that was not an end to the matter.
There is some support in case law for the proposition that where someone makes a living from taking a number of similar short-term engagements with different engagers, the income from those engagements may fall to be treated as income from an over-arching business as a self-employed person rather than from a succession of separate employments. That principle was stated in 1933 in relation to an actress (in Davies v Braithwaite 18 TC 198) and applied to a vision mixer 60 years later (in Hall v Lorimer 66 TC 349).
It must also be said that case law also demonstrates (Fall v Hitchen 49 TC 433) that if the facts support the analysis that an engagement is made under a contract of service, that engagement is an employment regardless of how short the duration and regardless of whether the employee is also carrying on similar activities on a self-employed basis.
Back to Ms Adams. She had for some years past undertaken, as an independent contractor rather than as an employee, work that was similar to that which she was doing for the BBC. It was therefore necessary, in the view of the Upper Tribunal, to consider ‘whether the activities that Ms Adams performed for the BBC under the hypothetical contract were of the same nature and kind as those that she carried on as an independent contractor’ such that the hypothetical contract fell to be treated, not as the employment contract that it prima facie appeared to be, but as an incident of that business.
In the tax years in question, the BBC contract accounted for 50% – 70% of Ms Adams’ income and took up ‘a good proportion’ of her working time. This was very different from the multiple engagements entered into by Lilian Braithwaite in the 1930s; and even further from those of the vision mixer (most of which lasted a single day). Nonetheless, the Upper Tribunal were persuaded that the length of the engagement had to be understood ‘in the context of Ms Adams’s chosen profession’ and in the light of ‘the uncertainties inherent in it.’ The Tribunal therefore concluded that a hypothetical direct contract would have been entered into ‘in the course of Ms Adams’s profession as a freelance journalist and broadcaster’ such that IR35 did not apply to it.
We think this was a surprising decision. It may go further. Meanwhile, it may be a helpful tool in arguing against IR35 in cases where there is a concomitant business activity.
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