HMRC wins IR35 case against BBC presenters

HM Revenue & Customs (HMRC) has won an IR35 tribunal case against three BBC presenters at the High Court, which could have a significant impact on the broadcasting industry.

The three presenters, Joanna Gosling, David Eaves and Tim Wilcox, had been considered to fall under IR35 during contracts with the BBC, but HMRC had pursued them for a total of £920,000 in unpaid taxes.

The presenters argued that they were self-employed, but the High Court ruled that all three had been pressured into being contracted via personal service companies (PSCs) by the BBC, with the court stated that there was an “imbalance of bargaining power”.

In the ruling, the High Court said that because the workers were told where, how and when to work, that the “assumed relationships were ones of employment”.

The case could be a landmark result for HMRC, with in excess of 100 presenters currently working for personal services companies that may have to pay back years of taxes owed.

The three presenters released a statement, which said: “The tribunal has found as a fact that we were forced into setting up personal service companies by the BBC.

“Furthermore, it found that the BBC knew that, in doing so, a tax risk and liability were passed onto us which they would otherwise have been responsible for – yet we were not made aware of these concerns.”

HMRC published draft legislation that will take effect in April 2020, which places the responsibility on the private sector to check if contractors must pay tax and national insurance contributions. This means that the onus will be on the employer using the services of the contractor, rather than the contractor themselves.

The rules came into effect for public sector organisations contracting workers through their own PSCs in 2017.

A BBC spokesperson, said: “We want to help presenters resolve any historic tax issues they face because of the way their employment status is now being assessed. We are reviewing the judgment and will work with each of the presenters to agree how we will help them.”