In Christa Ackroyd Media v HMRC UKUT0326 the Upper Tribunal dismissed a TV presenters appeal against IR35 applying to her personal service company; the BBC did exercise sufficient control over her work for an employment relationship to exist.

The IR35 rules provide for employment taxes on a Personal service company (PSC):

  • Where the arrangements between the worker and the end client are such that, if engaged directly, the worker would have been an employee.
  • The PSC must treat the amounts received as employment income of the individual and operate PAYE.

Christa Ackroyd, presenter of BBC1’s “Look North” until 2013, was engaged by the BBC via her PSC, Christa Ackroyd Media Limited (CAM).

  • The dispute was whether, if Ackroyd had been engaged directly by the BBC on the same terms, she would have been an employee.
  • The FTT said two conditions must be met for there to be a hypothetical contract of employment; mutuality of obligation and control. They found both were, and IR35 applied.
  • In particular, the FTT said the BBC would, at the very least, have had an expectation that Christa Ackroyd would abide by their Editorial Guidelines. As she was not bound by contract to follow the Guidelines, the BBC must have exercised control over her work.

CAM appealed to the Upper tribunal on the sole ground that the FTT had erred in law in deciding that the BBC had sufficient control for an employment relationship to exist had the services been directly supplied.

The UT dismissed the appeal finding that:

  • The FTT took the wrong approach in construing the contract, by implying a right of ultimate control on the basis it was necessary to achieve business efficacy, when it was not obliged to do so, but it had reached the same result as if it had taken the right approach.
  • The FTT rejected Ms Ackroyd’s evidence that she had “day-to-day control” over her work; concluded that the BBC editor of Look North had the ultimate right to decide what stories were covered and how. It interpreted the Contract as giving the BBC the right to require her to work on a particular day and direct what work she did and concluded that the BBC could decide and direct who she would interview.
  • These findings alone would point to a conclusion that the BBC had the ultimate right of control over the provision of Ms Ackroyd’s services and, when considered in the context of other factors such as the fact that the contract was a fixed term 7-year contract, the FTT had reached a reasonable conclusion,
  • There was no need for a framework of control for an employment relationship to exist, such as having a line manager, being subject to formal appraisals or effective sanctions in place, to be able to control Ms Ackroyd.
  • There was no rationale for the FTT to ignore the restrictions imposed by the BBC editorial guidelines when determining the level of control. It would have been wrong to leave them out of account because of their potential application to other service providers.

Comment:

Since the Christa Ackroyd FTT case was heard, the Tribunal has heard three other IR35 cases involving TV presenters. Lorraine Kelly and Kay Adams both won their appeals, whilst Joanna Gosling, Tim Willcox and David Eades, who also worked for the BBC, lost their joint appeal. Of course those cases do not have any legal precedent whereas this decision, being from the Upper Tribunal, does.

Links to our guides:

Personal Service companies and tax
IR35: Off-payroll working 

External link:
Christa Ackroyd Media v HMRC UKUT0326

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