Kaye Adams, presenter of the television show Loose Women, has become the latest broadcaster to win a case against HM Revenue & Customs over her employment status.
The tax authority had argued that Ms Adams — who also hosts BBC Radio Scotland’s daily morning show — was an employee of the BBC, rather than a freelancer, and that IR35 law should apply.
This law is designed to crack down on tax avoidance by so-called disguised employees who supply their services to clients via a limited company, but would otherwise be considered employees.
On Tuesday, the First-tier Tribunal ruled in favour of Ms Adams’ company, Atholl House Productions. It upheld the company’s appeal against a PAYE tax bill of about £81,000 and a further £43,000 in national insurance contributions for the presenter’s engagements with the BBC between March 2015 and March 2017.
Ms Adams is best known for her appearances on ITV’s Loose Women. She also appears on Press Preview on Sky News and writes regular columns for various newspapers and magazines.
Judge Tony Beare said that Ms Adams’ 20-year career as a freelancer and roles outside the BBC showed the broadcaster was in business on her own account.
“Ms Adams was not entitled under each actual agreement to any holiday or sick pay, maternity leave or a pension entitlement [from the BBC],” he added. “These are also features which are inconsistent with a relationship of employer and employee.”
HMRC’s defeat is a further setback for the tax authority, which lost a high profile IR35 case against TV presenter Lorraine Kelly last month. It also highlighted the difficulties businesses are likely to face from April 2020 when they will be required to determine the IR35 status of contractors who use limited companies.
Dave Chaplin, chief executive of ContractorCalculator, a news and advice website, said HMRC’s belief that there were hundreds of thousands of disguised employees was “a fiction”.
“The truth is that HMRC has wrongly pursued people in its quest to collect additional taxes from individuals which [it] labels ‘deemed employees’ and subjected them to years of uncertainty and stress, threatening their livelihoods and way of working,” he added.
Ms Adams’ case is the fifth loss for HMRC in six IR35 cases that have come to tribunal since 2017, according to Andy Chamberlain, deputy policy director at the Association of Independent Professionals and the Self Employed, a trade body.
The case was an example of “HMRC’s complete failure to understand its own labyrinthine self-employed tax laws,” Mr Chamberlain added.
Mr Chamberlain also criticised the government’s “check employment status for tax” tool (CEST) which is designed to show whether IR35 rules apply, saying it was too narrowly focused to be effective.
“This case demonstrates that HMRC’s approach, fixating on just one element of IR35, is flawed and that the bigger picture of someone’s employment status must be considered as a whole in order to reach a definitive conclusion,” said Julia Kermode, chief executive of the Freelancer and Contractor Services Association, a trade body.
HMRC said it was disappointed the tribunal had decided the IR35 rules did not apply in Ms Adams’ case and it would carefully consider the outcome before deciding whether to appeal. “CEST is accurate and HMRC stands by its results,” it said. “CEST has been thoroughly tested and gives the right answer if you put in the right facts.”