HMRC’s win on IR35 over television presenter’s services
In Red, White and Green Ltd v HMRC [2020] UKFTT (TC/2017/03624) (21 February 2020), the FTT found that there was sufficient mutuality of obligation and control in the services provided to ITV by Eamonn Holmes via his personal service company to conclude they were within the intermediaries legislation. A hypothetical contract between Mr Holmes and ITV would have been a contract of service rather than a contract for services.
Mr Holmes (H) had been a presenter on ITV’s Good Morning programme from 2006. In the tax years in question, he had been engaged via his personal service company (RWG) with a series of contacts between RWG and ITV.
HMRC raised determinations under IR35 on the basis that, under a hypothetical contract between H and ITV, H would have been an employee of ITV. RWG would accordingly be required to operate PAYE and NIC.
The FTT took a two-stage approach:
What was the basis on which ITV and H would have engaged had there been a direct contract between them?
Would that assumed contract have been a contract of employment or self-employment?
Dismissing RWG’s appeal, the FTT found that the assumed contract would be identical to that entered into between RWG and ITV.
On employment status, ITV was obliged to provide work and pay a fee, and H was obliged to do that work. Although H contended that he was answerable to nobody but himself, the real control was exercised by ITV.
The FTT found that there was mutuality of obligation and control, and the deemed contract would have been one of employment.
Why it matters: This is another case on whether IR35 applies to services provided by a media personality. As ever, these cases are highly fact specific and there is no direct read across from one to another. Here, the tribunal was satisfied that there was sufficient mutuality of obligation and control to conclude that the relationship between Mr Holmes and ITV would have been one of employment had he been engaged directly. It is interesting to compare this with the Lorraine Kelly case, where the decision went the other way. Both individuals are long-standing presenters on ITV morning shows, yet on the facts their status was found to be different. This shows the difficulty of applying the IR35 criteria consistently and highlights the sorts of problems which will be faced when companies in the private sector have to start making status determinations under the new off-payroll rules from April this year. It took three days of hearings and 272 paragraphs for the tribunal to reach its conclusion. Engagers will not have the luxury of that amount of time and even when operating in good faith will still be at risk of getting things wrong.
HMRC’s win on IR35 over television presenter’s services
In Red, White and Green Ltd v HMRC [2020] UKFTT (TC/2017/03624) (21 February 2020), the FTT found that there was sufficient mutuality of obligation and control in the services provided to ITV by Eamonn Holmes via his personal service company to conclude they were within the intermediaries legislation. A hypothetical contract between Mr Holmes and ITV would have been a contract of service rather than a contract for services.
Mr Holmes (H) had been a presenter on ITV’s Good Morning programme from 2006. In the tax years in question, he had been engaged via his personal service company (RWG) with a series of contacts between RWG and ITV.
HMRC raised determinations under IR35 on the basis that, under a hypothetical contract between H and ITV, H would have been an employee of ITV. RWG would accordingly be required to operate PAYE and NIC.
The FTT took a two-stage approach:
What was the basis on which ITV and H would have engaged had there been a direct contract between them?
Would that assumed contract have been a contract of employment or self-employment?
Dismissing RWG’s appeal, the FTT found that the assumed contract would be identical to that entered into between RWG and ITV.
On employment status, ITV was obliged to provide work and pay a fee, and H was obliged to do that work. Although H contended that he was answerable to nobody but himself, the real control was exercised by ITV.
The FTT found that there was mutuality of obligation and control, and the deemed contract would have been one of employment.
Why it matters: This is another case on whether IR35 applies to services provided by a media personality. As ever, these cases are highly fact specific and there is no direct read across from one to another. Here, the tribunal was satisfied that there was sufficient mutuality of obligation and control to conclude that the relationship between Mr Holmes and ITV would have been one of employment had he been engaged directly. It is interesting to compare this with the Lorraine Kelly case, where the decision went the other way. Both individuals are long-standing presenters on ITV morning shows, yet on the facts their status was found to be different. This shows the difficulty of applying the IR35 criteria consistently and highlights the sorts of problems which will be faced when companies in the private sector have to start making status determinations under the new off-payroll rules from April this year. It took three days of hearings and 272 paragraphs for the tribunal to reach its conclusion. Engagers will not have the luxury of that amount of time and even when operating in good faith will still be at risk of getting things wrong.
