A positive IR35 case ruling has been made for presenter Adrian Chiles and his media company Basic Broadcasting Limited, after more than seven tough years and two tribunals.
Once the tribunal had completed its analysis of the contracts in question, and considered all of the circumstances and activities as a whole, they decided that all of the engagements should be treated as part and parcel of the nature of his business. The tribunal concluded that on that basis all of the contracts were contracts for services, not contracts of employment, which means IR35 did not apply.
In a similar decision to that of Kaye Adams in 2021, the evidence proved that Mr Chiles was in business on his own account, which was evident from points including:
- Hiring his own personal assistant.
- Paying an agency 15% of his fees to manage his career.
- He was an entertainer and a “brand”.
- He carried out unpaid activities to maintain his profile whilst turning down a variety of work.
- He helped create a show and was entitled to a 50% share of production profits with a television production company as well as the agency managing him.
- He developed and pitched his own ideas and contributed to other television programmes.
- He presented programmes for multiple production companies.
- He wrote for several national newspapers.
- He had provided his services as a broadcaster and journalist to a significant number of clients. From 1996 to 2019 he contracted with nearly 100 different third parties.
- He was able to benefit from sound business management.
The tribunal made it clear that there is no suggestion that Mr Chiles set out to avoid paying tax by supplying his services through Basic Broadcasting Limited. Based on the decision taken from the mass of evidence analysed, it looks as though there are little or no credible avenues for an appeal by HMRC against the ruling.
HMRC began their investigation in 2014, but the first hearing did not take place until 2019. The Judge then contracted Covid-19 in the early part of the pandemic and suffered from the effects of long covid, which meant she could not return to judicial work or write the decision.
As a result, the tribunal decided the appeal would be reheard, which led to more oral submissions in November 2021. The delay meant Mr Chiles faced extra legal costs, which on top of the shadow of potential significant extra taxes and National Insurance Contributions that could have been demanded by HMRC, must have caused him significant stress during the whole period of the tribunal and during his appeal.
Can HMRC appeal the decision?
It is highly unlikely but, HMRC could seek to appeal the decision, but they must appeal by claiming an error in the application of the law or by conclusions being drawn based on the findings of fact, such as Edwards vs Bairstow.
Watch this space.