'The Telegraph' has discovered that the public face and voice of HMRC's self assessment advertising campaign, Moira Stuart, has been exploiting her services through her own company, Moira Stuart Ltd since 1st April 2010.
Moira Stuart Ltd's first accounts to 31st March 2011 show income of £22,607 and after deducting administrative expenses of £1,749 the company paid corporation tax of £4,380 at a rate of 21%. Had she received the money as a salary she would have paid tax of up to £11,303, at the rate of 50%, as well as suffering NIC.
The motivation for Miss Stuart to form her own company could well have been in reaction to the introduction of Labour's 50% additional rate of tax that became effective from 6th April 2010.
Miss Stuart, 62, came to prominence as a BBC newsreader in the early 1980's but left our TV screens in 2007 when she was replaced by a younger colleague on Andrew Marr's 'Sunday AM' show. She has however been reading the news on Chris Evans' breakfast show on BBC Radio 2 for the past two years.
In 2008 HMRC started using her in its advertising campaigns. She replaced Adam Hart-Davis following his public criticism of the Revenue. He described the tax system as difficult to understand and VAT as “absurdly complicated”.
As far as HMRC are concerned IR35 is not an issue when it comes to the celebrity's advertising work for the department because the work is specific and they do not employ her directly. Is that all that is required nowadays to place oneself firmly outside of the intermediaries legislation??
One would have thought that a website aimed at the contracting and freelance community would have a slightly more balanced view of such things.
Ms Stuart provides her services as a presenter to multiple clients through a limited company structure.
It’s not really much of a story is it?
Very poor reporting from Contractor Weekly.
#FAIL
Not just the one client – the BBC then?
We do not know the composition of Moira Stuart Ltd’s income for y/e 31.03.11 so it cannot be said with any certainty as to whether any BBC income is included in the turnover.
For IR35 purposes each contract is dealt with on its own merits. Exclusivity is only a minor test for employment status so whilst providing services to a number of clients would be a pointer towards self-employment it would not be conclusive in itself.
The article is of interest for a number of reasons. Moira Stuart is a celebrity using a PSC to undertake work for HMRC. HMRC’s explanation as to why they do not consider IR35 an issue is somewhat lacking. On these points I would defend the inclusion of the story.
So, turnover £22,607, CT + X’s £6129, leaving £16,478 net profit after CT. *If* she takes that out (!) and she’s on higher rate (40%), she’ll pay another 32.5% = £5,767, total tax £10,147, or if on the highest rate, another 42.5% = £7003 = total tax of £11,383 – MORE than the “£50%” rate. And if she doesn’t take it out, she’s only “saved” tax by not taking income …. yet. Where’s the fuss? Appalling reporting by the original source, and CW should do more than just re-quote, they should educate.
Don’t assume that she is using her company for her contracting services. She isn’t. If you look at the publicly available accounts, the £22k income is from a 10% investment in her partnership which is presumably her trading vehicle which makes a far higher profit. I’d suggest that the £22k magically reduces her partnership profit share to below £150k thus enabling her to escape 50% by leaving the money in the company rather than paying it out as dividends (no divis shown in the accounts). Now it doesn’t look quite so innocent does it? A few facts make quite a difference.