The HMRC emerged victorious in a recent IR35 tax tribunal when it won a case against three presenters of BBC. Experts indicate that this win can inflict a major impact on the broadcasting industry.
Joanna Gosling, Tim Willcox, and David Eades were the BBC presenters who fell into the category of IR35 due to the nature of their BBC contracts. They were unable to appeal against their tax bills totalling up to £300,000. However, even then, the HMRC is not bullish that they can get them to pay the entire amount.
Although two conflicting opinions were taken by two of the tribunal judges regarding the IR35 status of these presenters, it was ultimately the vote of Judge Harriet Morgan, which changed the outcome of the cases. He reasoned that there was “sufficient mutuality and at least a sufficient framework of control to place the assumed relationships between the BBC and the presenters in the employment field.”
There was some bad news for the HMRC as well. It was not allowed to pursue its tax demands that have built up over the years. This was because the tribunal discovered that not only did the presenters act in good faith, but their advisors also displayed a decent attitude.
For this case, the tribunal accepted that BBC left no choice for the presenters than to use limited companies to offer their services. Moreover, the BBC clearly did not discuss the risks that came with IR35.
HMRC released multiple tax bills for presenters. Willcox, Eades, and Gosling were the first ones to challenge the bills in tribunals. The HMRC revealed that these bills were accumulated over a lot of years.
Experts believe that this decision is going to raise concerns about the hiring practices of BBC.
Meanwhile, a BBC spokesperson explained that the organisation plans to assist presenters in resolving their tax problems, in case their employment status is being processed differently. To do their part, they have announced that they will coordinate with all the presenters and can think about how to help their specific cases.
The latest hearings of presenters from the media circles have shown a multitude of results. With the current split judgment, the situation has become more uncertain for taxpayers belonging to the broadcasting industry. The onus to create and share guidance that can help the broadcasting industry is now on the HMRC.