Broadcaster Adrian Chiles has won a seven-year-long IR35 case at tribunal
Adrian Chiles, who has presented shows including The One Show and Match of the Day 2, as well as ITV’s Daybreak, was handed two huge tax bills by HMRC.
One was for income tax and the other national insurance contributions totalling £1,249,233 and £460,739 respectively.
The bills covered a five-year period – from April 2012 to April 2017 – for work Chiles had carried out through his company, Basic Broadcasting Ltd and related specifically to three BBC and two ITV contracts.
Chiles deemed ‘in business on his own account’
The taxman claimed that the work Chiles carried out during these contracts fell within the scope of IR35 and therefore he should have been taxed as an employee.
However, after a seven-year investigation and two first-tier tribunal hearings over an eight-day period, Judge Jonathan Cannan ruled in Chiles’ favour.
In his judgement, Judge Cannan added there were many factors that proved Chiles’ outside IR35 status, which centred on being in business on his own account.
These included; having his own personal assistant, paying an agency 15 per cent to manage and develop his career and having a large number of clients simultaneously.
Cannan also pointed out that since Chiles’ company had been incorporated in 1996, he had provided his services as a broadcaster and journalist to nearly 100 different clients.
IR35 case confirms HMRC ‘struggles to understand’ rules
In response to the ruling, HMRC said it “will carefully analyse the outcome of the tribunal before considering next steps.”
Andy Chamberlain, director of policy at self-employment trade body IPSE, said: “The result confirms yet again that HMRC struggles to understand the status rules just like everyone else.
“HMRC would have felt certain that Mr Chiles’ engagements were ‘inside’ IR35, which is why it put so much time and resource into it, at great cost to the public purse. Yet the revenue was wrong – IR35 did not apply to these contracts.
“If HMRC cannot make an accurate determination, how does it expect anyone else to do it?”
Chamberlain also highlighted that the determining factor in this case was that Chiles “was in-business-on-his-own account”, which “completely undermines the off-payroll working rules.”
Reform fails to consider if contractors are running a business
“The new off-payroll rules require end clients to determine the IR35 status of each of its engagements, yet it has no means of knowing whether the contractor is running a business or not,” he said.
“Without access to all the relevant information, clients cannot make accurate determinations. This issue must be addressed if clients, agencies and contractors are to have any faith in their processes.”
Adrian Chiles is one many high-profile self-employed people HMRC has targeted over IR35. Former Sky Sports TV presenter Dave Clark was handed a £281,000 tax bill after losing his IR35 appeal in November 2021.
Lorraine Kelly won her case against the tax authority over a £1.2 million bill recently. Meanwhile, BBC Match of the Day host Gary Lineker’s £4.9 million IR35 case is ongoing.
What does this mean for contractors?
HMRC’s pursuit of high-profile individuals for huge sums of tax is concerning, but for contractors, Chiles’ IR35 case win shows that it is possible to operate compliantly outside IR35.
This tribunal result also highlights the importance of operating as a true business when evidencing IR35 status – whether through multiple clients or additional income streams.