‘Cat out of bag’ on HMRC’s investigation, which could join IR35 ‘decade club’, according to one expert
Jeremy Vine is the latest high-profile media personality to be targeted by HMRC over suspected non-compliance with the IR35 legislation, it has emerged.
The presenter has been subject to an ongoing investigation by HMRC, concerning the 2013/14 to 2015/16 tax years, for contracts held with the BBC. Following a preliminary issues hearing on 5th June, a ruling has been issued which will see the case heard in full at a First Tier tribunal, though a date is yet to be confirmed.
Vine, 59, is perhaps best known for his work on BBC Radio 2 but has also worked on other BBC productions, including Eggheads and Points of View, during the tax years in question.
With HMRC of the opinion that Vine had “personally performed services for the BBC” during this time, the tax office is attempting to recover an undisclosed tax liability from the contractor. One publication has estimated that the NIC portion of the liability in the 2015/16 tax year alone could be as high as £20,000.
The case is just the latest example of HMRC pursuing high-profile presenters in its efforts to police IR35 compliance. Some – including Gary Lineker and Kaye Adams – have successfully defended themselves against HMRC’s action. Others, like Eamonn Holmes, have lost their cases and been issued with significant liabilities as a result.
HMRC decisions were ‘premature and invalid’, Vine argues
Vine has contested HMRC’s view that he belonged inside IR35, arguing that the tax office’s opinions
were “all premature and therefore invalid”. The decisions were issued “on a protective basis only and the requisite knowledge/belief has not been formed by the officer effecting the decision”, his legal team argued.
The presenter also believed that the “intermediaries legislation does not apply, and the amounts are estimated and excessive”. However, the tribunal judge – Amanda Brown KC – ruled against Vine, on the grounds that HMRC officers “were entitled to reasonably” reach their conclusions “on the evidence available to them”.
Cases drag on because ‘even tax professionals’ struggle to understand IR35
Following the decision’s release, Dave Chaplin – founder of Contractor Calculator and CEO of IR35 Shield – shared his thoughts about the ruling on the professional networking site, LinkedIn.
The decision to send the case to a tribunal hearings means “the cat is out of the bag” on HMRC’s lengthy enquiry into Vine’s tax affairs, Chaplin said. He also suggested the enquiry “was likely triggered in 2017” following lengthy HMRC investigations at the BBC.
With the enquiry potentially already ongoing for seven years, according to Chaplin’s estimates, he believes that Vine “might join the IR35-decade-club” alongside Kaye Adams.
Speaking to FTAdvisor, Chaplin said such a possibility reflects the complexity of the IR35 rules, and that the Vine investigation is “effectively a story about how long these tax cases” take to resolve. “It is not right that someone is kept in the dark without tax certainty over engagements entered into over 10 years ago”, he added.
Another tax expert – John Hood, a partner at the accountancy firm Moore Kingston Smith, agreed that the “complexities” behind the IR35 legislation can lead to drawn-out cases. Occasionally, he added, “even tax professionals don’t understand how it is supposed to work”.
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