01743 271071 [email protected]

Celebrity IR35 Cases, see blog. https://www.morganjones.co.uk/2019/08/celebrity-ir35/

I have often written about HMRC’s almost fanatical attempts to chase high-profile Radio and TV presenters, in an attempt to shoehorn these celebrities into the tax office’s own peculiar interpretation of the IR35 rules. That being said, HMRC’s seemingly obsessive desire to pursue Loose Women presenter Kaye Adams, has hit the courts once more!

I first Blogged about Ms Adams on 9th August 2019, when she won the first round of her epic court battle with HMRC; but before I get into the meat of today’s Blog, I think a short recap is appropriate.

Kaye Adams’ IR35 Victory Recap

Kaye Adams has worked as a freelance journalist and author for over 20 years, but this dispute only concerns her contracts with the BBC for shows on Radio Scotland through her personal service company Atholl House Productions Ltd.

In July 2014, HMRC opened an enquiry into Adams’ Tax Returns covering April 2013 to April 2017, but after several years of back-and-forth, Adams’ got fed up and appealed to the first-tier tribunal (FTT). Almost on the steps of the court, HMRC conceded the first two tax years, leaving the tribunal to consider the tax and NIC due for 2015/16 and 2016/17 which totalled £125,000 plus interest and penalties.

However, the FTT found in favour of Adams as I reported in 2019 but both sides had to pay their own costs, HMRC then appealed to the Upper Tribunal (UTT), claiming the FTT had made errors in law. Once again, the court found in favour of Ms Adams. HMRC was ordered to pay the taxpayer’s costs of £61,000 but argued about the amount and finally offered only £45,000. Adams accepted this offer due to the escalating costs of fighting the point, plus the fact that her liability insurance would no longer cover the rising costs.

Kaye Adams’ IR35 Victory: 2022-Round Three, the Court of Appeal

HMRC refused to give up and took the case up to the Court of Appeal, which found that both the FTT and UTT had made some errors and referred the case all the way back to the original FTT. To make matters worse for Adams, they also said that she had to pay her own and HMRC’s costs and repay £45,000 which HMRC had paid her after the UTT hearing.

Kaye Adams’ IR35 Victory:The 2023 FTT Decision

The FTT considered the terms of the hypothetical contract and considered whether it was indicative of self-employment or employment, such as the requirement to attend editorial meetings and training. It tried to weigh those issues and look at the full picture. The FTT then went further and considered who knew what at the time the written contract was executed.

When these considerations were looked at together with the terms of the original contract, the FTT found more factors that pointed towards self-employment than employment, but the judge did admit that the tribunal’s decision was finely balanced.

Kaye Adams’ IR35 Victory: A pyrrhic victory?

Although the disputed tax bill was £124,000, the amount that would be payable after taking into account taxes already paid by Adams is in the region of £70,000. Also, Adams has spent far more than £70k in defending the case, whilst HMRC has spent around £250,000 on the prosecution.

Kaye Adams released a statement following the result which said: “I am delighted that the First Tier Tribunal has confirmed my self-employed status for the third time, but there is no jubilation for me in this result. Over the nine years of this investigation, the mental stress has been close to unbearable at times, and the legal costs I have incurred far outweigh the tax at stake.

Tax Accountant’s view

Unfortunately for Kaye Adams, HMRC has up to 56 days from the release of the FTT judgment on 29th November 2023 to ask the court for permission to appeal the decision.

Given the mental suffering HMRC have put this taxpayer through, not to mention the significant costs, I sincerely hope for her sake that saner minds take over and that HMRC finally accepts defeat and does not drag this out any longer by appealing.