In Big Bad Wolff Limited v HMRC [2019] UKUT121, the Upper Tribunal (UT) upheld the decision of the FTT finding that the special rules for actors prior to 6 April 2014 did not circumvent the deeming provisions of IR35.

  • The employment intermediary rules, known as IR35 imposes employment taxes on a personal service company (PSC) where the arrangements between the worker and the end client are such that the worker would have been an employee if engaged directly.
  • Prior to 6 April 2014, special rules applied to entertainers, whereby they would be categorised as employed earners for NIC purposes, even in circumstances where they would be deemed self employed for income tax purposes; from 6 April 2014 the normal rules apply.

The appellant (Wolff) was the personal service company of Robert Glenister (RG), but it was noted that this was a test case for a number of other actors in similar circumstances.

On 3 February 2016, HMRC raised an assessment for Class 1 NIC covering the period from 6 April 2004 to 5 April 2014.

It was common ground that

  • RG had contracted his services through Wolff until 2011, after which he had contracted with end clients directly
  • The contract between RG and the end clients would have been a contract for services, not employment
  • If RG had contracted directly, he would have been deemed employed for NIC purposes.

The FTT found that

  • The legislation was intended to catch this situation
  • RG would have been an employed earner (though not an employee) for NIC purposes if he contracted directly
  • The assessment was upheld.

The company appealed to the UT:

It argued that the relevant question set out in Regulation 6(1)(c) of the Intermediaries Regulations is whether, had he entered into a hypothetical direct contract with end clients, Mr Glenister would have been an actual employee (and not merely a person treated as an employee). Given that he was an actor he would not have been actual employee and so IR35 did not apply.

The UT found:

  • Clear indication from the legislative provisions as a whole that Parliament did not intend Regulation 6(1)(c) to be limited to “actual” employments.
  • The Intermediaries Regulations were made under authority set out in s4A of SSCBA. Section 4A(1)(c) of SSCBA permits regulations to deal with circumstances where, if a worker had contracted directly, he or she “would be regarded for the purposes of the applicable provisions of this Act as employed in employed earner’s employment”.
  • Section 4A was therefore enacted after s2 of SSCBA and uses the concept of “employed earner” that is defined in s2. Therefore, Parliament must necessarily have been aware, when enacting s4A, that the concept of “employed earner” embraced both “actual” employees and, by virtue of s2(3) of SSCBA, persons who are “treated” as employees by other statutory provisions or regulations.


Deeming provisions can often feel illogical and unfair for taxpayers however, IR35 does what it does and this is the way that it works.


Big Bad Wolff Limited v HMRC [2017] UKFTT 729 (TC)

Entertainers to be self employed for NICS

NIC: New guidance for entertainers