IR35 Making the Headlines
Some of the potential issues facing “self-employed consultants” were highlighted at the end of October 2019 in a case involving Christa Ackroyd, a presenter on the BBC’s Look North programme.
Ackroyd had provided her services to the BBC through her personal services company, Christa Ackroyd Media Limited, and had paid tax on the basis that she was a freelance contractor, not an employee.
HMRC invoked the IR35 rules that came into force in April 2017 in relation to public bodies (such as the BBC) to argue that she would have been an employee of the BBC if that intermediary company had not been used.
The outcome is that Christa Ackroyd Media Limited owes HMRC some £420,000 in income tax and national insurance contributions.
“Employment status is never a matter of choice; it is always dictated by the facts” commented an HMRC spokesperson after the ruling, adding “and when the wrong tax is being paid, we put things right”. The judge highlighted as key points the fact that the BBC could control the work that the individual did and that this was effectively a full-time job.
Those same rules will come into force in April 2020 in relation to large and medium-sized businesses in the private sector. This case is a reminder of the need to review arrangements of this nature before those changes come into effect.Back to Our Thinking →