Lights, camera, (IR35) action

HMRC firmly sticking their jackboot into the entertainment industry

Earlier this year we saw former BBC Look North presenter, Christa Ackroyd, lose her IR35 appeal at the First-tier Tax Tribunal, although she is to carry on the fight. At the same time, it was also understood that there were numerous other BBC cases waiting to be heard at Tribunal.

It is not just celebrities of the Beeb that HMRC have in their sights, as The Mail on Sunday has reported that many of ITV’s biggest stars are anxiously awaiting the judgment of a ‘test case’ involving ‘This Morning’ host, Eamonn Holmes. Should he lose, then it is estimated that he could be looking at a bill in the region of £2 million back tax, accumulated over the last seven years. According to the last accounts of his personal service company, Red White and Green Ltd, as at 30^th April 2017, the company had cash reserves just shy of £3.1 million.

It is estimated that the 58-year old who has been freelancing for 28 years earns at least £700K per annum from his TV work. He is also a co-director of Holmes and Away Ltd, along with his co-presenter wife, Ruth Langsford. However, there are no details as to the basis under which Ms Langford is remunerated for her TV appearances.

It is 17 weeks now since the presenter had his appeal heard at Central Court in London, which lasted a week, and he is still awaiting the outcome. He told the Mail, “If they [HMRC] win against me they will go after everyone else, everyone. Ant and Dec will be next” and that, “the country is broke and they are coming to get us.”

Of HMRC’s now all far too familiar bias approach in IR35 investigations, Holmes said, “they have reinvented the rules in the past couple of years. There is nobody more freelance than me, but they are trying to prove our jobs are regular and guaranteed. But they could go at any moment.” I’m sure that many a contractor who has experienced the IR35 enquiry ordeal will identify with that statement.

Other ITV celebrities who are also directors of their own limited companies include Ant and Dec, Phillip Schofield, Holly Willoughby and Lorraine Kelly. However, there are no details as to the basis under which each are remunerated by the broadcaster.

An HMRC spokesman told The Mail on Sunday:

“It is clear that most TV presenters will fall into the category of being employees based on the nature of their work, and the policy that sets this out has been the same for years.”

So much for open-mindedness and impartiality! To echo the comments of one accountant in the tabloid newspaper, “HMRC are behaving like playground bullies.” That is so true as it is exactly the behaviour I am witnessing in the IR35 enquiries I am involved with, not just confined to the entertainment industry but across all sectors.

Dame Jenni Murray, aged 68 and presenter of ‘Woman’s Hour’ is also set to cross swords with the Revenue over IR35 at the Tax Tribunal. She is one of the BBC’s highly respected presenters, joining the corporation in 1973.

She closed her PSC, Clear Focus Ltd in 2014 and was put on the BBC payroll. Like many of her counterparts, Dame Jenni will reportedly argue that she was obliged to form her PSC by the BBC.