Tax & admin · 19 February 2018

Former BBC presenter to pay HMRC over 400, 000 after losing IR35 case

Christa Ackroyd was a former BBC Look North presenter
Christa Ackroyd, a former BBC presenter, has been ordered to pay more than 400, 000 in unpaid tax after the High Court ruled that she was caught by IR35 tax legislation.

HMRC has won an IR35 case against former presenter of BBC Look North, Christa Ackroyd, who worked for the BBC through Christa Ackroyd Media (CAM).

HMRC contested CAM Ltd’s engagement with the BBC in the first IR35 case since 2011, and it has resulted in a bill just shy of 420, 000 for CAM. The bill covers the tax years 2006/7 to 2012/13.

IR35 is designed to tackle tax avoidance by workers carrying out services via intermediary companies to get out of paying income tax and National Insurance contributions. The court found that Ackroyd was an employee, rather than a contractor, and CAM therefore owes the unpaid to HMRC.

Essentially, if a court rules that the person would have been employed were it not for the intermediary company, they are caught by IR35.

Find out more about what IR35 is and how it affects you as a business owner

The three main tests of employment include: the degree of control the client has over the work; whether a specific worker is required or whether they can be substituted; and whether the employer is obliged to offer work, and the worker obliged to accept.

In Ackroyd’s case, the ruling determined that these three things applied to the engagement:

  • Personal service was required (there was no right to substitution)
  • The BBC exercised significant control over the work performed by Ms Ackroyd
  • There were obligations on both parties (mutuality of obligation) to carry out work and make regular, monthly payments for that work.
Furthermore, CAM was not permitted to seek work with other organisations without the green light from the BBC.

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IR35

 

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The Treasury’s hints that IR35 rules could be extended to the private sector are more than unsettling, writes Julia Kermode, chief executive of The Freelancer & Contractor Services Association.


 
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ABOUT THE EXPERT

Letitia Booty is a special projects journalist for Business Advice. She has a BA in English Literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.

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