Renowned TV and radio presenter, Eamonn Holmes, has lost an IR35 tax tribunal despite having spent some forty years working as a freelance broadcaster. The presenter of This Morning was contesting HMRC’s view that contracts held in the 2011/12 and 2014/15 tax years between his company, ‘Red, White and Green Limited’ and ITV belonged inside IR35.
According to reports, the amount of tax he will be expected to repay to HMRC is in the region of £250,000. At this stage, it is not known if the ruling will be appealed by Holmes, who is apparently to first consult with lawyers to understand this decision.
In reaction to HMRC’s victory, the presenter’s spokesperson said: “Eamonn has always considered himself a self-employed freelancer and has never knowingly avoided paying taxes. He is taking the time to understand the extensive document detailing the outcome. Like many people across the country and from many different professions, he is seeking to comprehend what this means; and simply wishes for clarity and consistency across the guidelines so that people don’t suffer the same confusion over these retrospective IR35 rulings.”
As stated by Contractor Calculator, the presence of Mutuality of Obligation (MoO) in the engagements played an important role in HMRC’s victory. As did the fact that Holmes worked under the control of ITV, despite having “considerable autonomy” when delivering his services. Tribunal Judge Harriet Morgan explained there was “at least a sufficient framework of control to place the assumed relationship between ITV and Mr Holmes in the employment field.”
Commenting on the verdict, Contractor Calculator’s Dave Chaplin said the ambiguity of the IR35 legislation was at fault, not Eamonn Holmes or ITV: “This is not a case of tax avoidance, and not the kind of situation which the IR35 legislation was brought in to combat, 20 years ago. In my view neither Holmes nor ITV share any blame here – the fault lies with an unworkable piece of legislation that no-one properly understands.”
Also touched on was the “cruel” timing of the result, which comes less than two months before controversial IR35 reform is extended to the private sector. Chaplin explained that “had he (Holmes) been investigated under the new rules, due to take effect in April 2020, he would not owe HMRC any money at all.”
Albeit concerning, this high-profile win for HMRC must not scare private sector firms into needlessly placing contractors inside IR35, stated Qdos CEO, Seb Maley: “Mr Holmes’ contract with ITV will have been quite different from the vast majority of contractor engagements. With this in mind, contractors, agencies and private sector firms that make well-informed decisions regarding status should not be deterred from engaging in outside IR35 arrangements.”
Eamonn Holmes is not the first well-known freelance presenter to have been targeted by HMRC. After investigating Christa Ackroyd, Lorraine Kelly, Talksport’s Paul Hawksbee and several others, it is now “no secret that HMRC is pursuing high-profile cases ahead of changes to the rules in the private sector”, said Qdos CEO, Maley, who also added: “Having already failed to win IR35 tribunals against Lorraine Kelly and Talksport’s Paul Hawksbee in the past year, the tax office still has difficulty interpreting the very rules it designed.”