In a case that could have lasting implications for the broadcasting industry, the HMRC has successfully won a tax case against three BBC presenters.
BBC Presenters, David Eades, Tim Wilcox, and Joanna Gosling have all been found to be within the scope of IR35 following an HMRC tribunal. However, both the presenters involved and their accountants were found to have acted in ‘good faith’ contrary to claims by the HMRC. This means that they will not have to pay back the entirety of their £300,000 tax bill.
The tribunal split the judges involved with one finding for and another against the HMRC. The final decision (and casting vote) came from Judge Harriet Morgan. She found there was “at least a sufficient framework of control to place the assumed relationships between the BBC and the presenters in the employment field.”
The decision, while far from clear cut, has raised further questions over the working relationships the BBC pursues with its presenters. In 2018, an IR35 case involving presenter Christa Ackroyd found that the BBC had insisted she enter into an agreement with them as a personal service company. She lost her appeal against a tax bill for more than £400,000. A further decision on this appeal is awaited from the Upper Tribunal.
The same scenario was uncovered in the current case, and the court recognised that the presenters involved had little choice but to interact with the BBC as a personal service company. However, the BBC argues that unclear HMRC guidance are also to blame. A spokesperson said:
“We have tried for a long time to agree a set of guidance with HMRC which gives certainty for the media industry. It’s vital that HMRC now provides the greater clarity which is still needed to avoid others having to go through this ordeal.”
The presenters impacted by this recent case released a statement, saying:
“We have endured eight years of HMRC investigation and eventual determinations to reach this point on what is clearly a difficult and unclear subject even for judges. It has been a depressing and stressful period for each of us. However, we are grateful that the judgement, in its entirety, shows we have acted in good faith throughout.”
The complexity of IR35 cases continues to be cause for heated debate and will remain a significant issue for contractors and businesses as the rollout of off-payroll reforms in the private sector draws closer. The presenters are now considering whether to appeal the decision.