A former BBC presenter is facing a large tax bill after a recent tax tribunal ruled in favour of HMRC, following a five-year dispute. As the first IR35 victory for HMRC in nine years, this case will likely have much wider impact.
The presenter received her salary via her personal service company (PSC), and under this arrangement was classed as a self-employed contractor and thereby circumvented paying income tax and National Insurance Contributions (NICs).
HMRC had contended that she was in fact an employee and therefore her personal service company was liable to pay tax accordingly. The court agreed that the “hypothetical contract” between the BBC and the Newsreader “would have been a contract of service rather than a contract for services” and thus the relationship was one of employment. Legacy income tax and NIC were both therefore due.
Whilst we are interested to see what happens to the remaining 100 investigations into BBC stars by HMRC, there may undoubtedly be much wider attempted application by HMRC. If you wish to (re)consider your own potential exposure in the IR35 arena (whether as a self-employed contractor, or a business using the same), then please contact:
Andrew Wilson or Andy Summers on 01788 539000.