Lorraine Kelly, the renowned television presenter, has won a tax case against HMRC. Albatel Ltd—the limited company of the broadcaster—was able to successfully appeal against a £900,000 tax bill. The tax bills are linked with those engagements with Breakfast Ltd which extended from September 2012 to July 2017.
The loss has further destabilised the HMRC’s initiatives; fingers are raised on the taxman’s implementation and understanding of the IR35 as the department is hell-bent on pursuing several freelance presenters.
In the much publicised recent case, control was one of the leading considerations. According to Judge Jennifer Dean,
“We are satisfied that control of Ms Kelly’s work pursuant to the hypothetical contract lay with Ms Kelly. In our view, the level of control falls far substantially below the sufficient degree required to demonstrate a contract for service.”
The judge further explained that they were satisfied with all of the submitted evidence by Ms. Kelly.
Doubts Rise over HMRC’s IR35 Understanding
Keith Gordon, who is representing Kelly, argued that HMRC’s dependence on the editorial control of ITV was fallacious. He compared a West End actor, who worked for 12 months in a show, to Kelly’s arrangement. Gordon explained the job responsibilities of the actor that he must wear the approved clothes by the production, move according to the given directions, and act according to the script. In comparison, Ms. Kelly had a greater degree of control over her performance.
Gordon then questioned the taxman and its understanding of the responsibilities pertaining to the ITV. He argued that HMRC had created faulty comparisons for the control test. He explained that it appeared that HMRC was trying to establish a statement when the taxman began a crackdown on the tax bills of several well known presenters. However, as the PAC (Public Accounts Committee) investigates the BBC controversy and cases like Ms. Kelly’s emerge, it is seems that HMRC has further dug a hole for themselves.
Gordon further explained that as the taxman’s faulty approaches are brought to light, he is unsure of the Government’s current plan to proceed with the implementation of the highly controversial Off-Payroll regulations in the private sector. He termed Ms Kelly’s case as a “slam dunk” and expressed surprise over HMRC’s pursuit of Kelly amidst the presence of clear-cut evidences in her favour.