The First Tier Tribunal has yet again found in favour of Ms Kaye Adams’ personal service company – Atholl House Productions Limited (AHPL) – in this long-standing IR35 case with HMRC. It would now be hoped that this enquiry, which has been ongoing for nearly 9 years, can finally be laid to rest.
Since AHPL initially appealed against the tax determinations and Class 1 National Insurance Contributions (NIC) decisions raised by HMRC on the basis that it considered that the engagement between AHPL and the BBC was one of deemed employment, this case has gone before five separate tribunals:
The latest tribunal case focused on the third limb of the statutory IR35 test, namely whether the circumstances in which Ms Adams carried out her services would have resulted in her being considered an employee for tax and NIC purposes if those services were provided under a contract directly between Ms Adams and the BBC.
This third limb test follows a three-stage process:
The Tribunal acknowledged that it was a finely balanced case and, on standing back and considering the various factors as a whole, found that the pointers towards self-employment outweighed those pointers towards employment. Those self-employment indicators included –
The Tribunal concluded that the IR35 legislation did not apply and upheld AHPL’s appeal.
Only time will tell whether the outcome of this latest appeal will have a positive effect on current IR35 cases being pursued by HMRC and whether it will result in HMRC changing its approach when looking at IR35 cases.
There is, of course, the potential for HMRC to look to appeal this latest decision so this might not be the end of the matter. However, if HMRC decide to keep going it, it will surely raise questions over whether this would be a good use of HMRC’s resources and public funds.
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