A number of other BBC News presenters are under review by HMRC and the case involving CAM may be the first of many cases to be taken to the FTT. The FTT pointed out that this case was not a lead case and therefore no other appeals were dependent upon its outcome.
HMRC raised assessments under the so-called IR35 legislation, alleging that the nature of Ms Ackroyd’s work for the BBC was that of employment, rather than self-employment. The case report is worth a read, as it makes some interesting comments about Ms Ackroyd as a witness and her relationship with the BBC. I’m not familiar with her work, but it’s clear that she was instrumental in achieving Look North’s dominance over its rival ITV programme. Additionally, it can be seen that the BBC may have acted in its own interests in this case and was not as supportive of Ms Ackroyd as it could have been.
The case report gives a good workout on the principles of employment status and the relevant case law. The decision looked at a number of points. The tribunal found that:
- There was mutuality of obligation (MOO), not least because the contract required Ms Ackroyd to work at least 225 days a year and for the BBC to pay fees based on the days worked. This was not a significant factor but it was not established that there was an absence of MOO.
- The control issue is chewed over at some length and hinged upon the nature of the hypothetical contract between Ms Ackroyd and the BBC and whether there was control over Ms Ackroyd. On the one hand as a live TV presenter, Ms Ackroyd could and did go off script; on the other, the contract in place gave CAM the right to control Ms Ackroyd, which meant that the BBC could ask her to present in the studio, at an outside location or work in some other role. It also meant that the BBC could ensure compliance with its editorial guidelines. The tribunal weighed the facts and decided that control was ultimately in the hands of the BBC.
- The requirement to provide personal services, or rather in the negative, the inability to furnish a substitute was looked at briefly. The nature of the work meant that Ms Ackroyd was one of the faces of Look North and not easily replaced.
- As a presenter Ms Ackroyd was seen as being part &parcel of Look North and, by extension, the BBC. She had a BBC e-mail address and attended BBC training seminars. It was also accepted that if the BBC was approached to provide Ms Ackroyd’s services to a third party, the enquirer would be directed to her and she was independent of the BBC in this respect.
- The final element considered was whether or not Ms Ackroyd was in business and bore real risk. There was little expenditure that she had to undertake to carry out her role and only a small element of her income was based on TV ratings and was therefore variable. Accordingly the tribunal concluded that she was not in business on her own account.
- Finally, the tribunal stepped back from the detailed arguments and took a holistic view of all of the evidence, deciding that, on balance, the contract was one of employment rather than self-employment.
The outcome for CAM and Ms Ackroyd was that HMRC’s demands for just under £420,000 in tax and national insurance have been upheld.
If you are engaged to work via a personal service company and have concerns about whether or not your engagement is IR35 compliant, contact tax partner John Sheehan on 01462 687333 or email firstname.lastname@example.org.