IR35 expert backs BBC newsreader ruling
A court ruling that relates to the appeals of two BBC newsreaders against the Intermediaries legislation is a rare example of how IR35 cases should be determined, says an expert.
In fact, instead of the “generic” detail on day-to-day working practices that HMRC relies on “time and again”, the tribunal judge rightly prioritises “what actually happened” when the newsreaders worked, says IR35 adviser Kate Cottrell.
The judge seems to have been helped to his correct approach by the BBC, which “sought to ensure that the right people, at all levels, were made available to HMRC to assist them in establishing the factual situation,” the ruling notes.
Sticking to this favouring of the actual over the theoretical, the judge then explains that guidelines the BBC operates would only be useful to determine status if they depict the actual working realities of the two newsreaders.
The judgement states: “Evidence about how the Editorial Guidelines were intended to operate is likely to be very much less valuable than evidence as to how the Guidelines were in fact applied”.
It also says: “Similarly, evidence about how the Guidelines were formulated and applied ‘across the BBC’ is of little import compared to how the Guidelines were applied”.
This is a refreshing change for Ms Cottrell, a member of the IR35 Forum who has represented contractors in numerous IR35 cases since leaving HM Revenue & Customs to set up her own employment status advisory.
“We have some recent cases where HMRC has issued formal demands based upon generic information [on working practices], even though we had already provided, in the form of a signed confirmation of the working arrangements, from a person who did know the contractor and did know the reality of the working practices and whose evidence is in conflict with the generic evidence.”
Cottrell adds that despite her often referring HMRC inspectors to the correct approach, outlined in both Synaptec v Young (2003) and the Special Commissioners’ case of Datagate Services (2007), IR35 enquiries just “plough on,” based on the generic details.
“But this BBC judgement reminds everyone that an individual has the freedom and the right to put their cases -- based on their own individual facts -- to the tribunal,” the Bauer & Cottrell co-founder says. “Indeed paragraph 256 of the judgement spells it out perfectly:
“‘The Tribunal is concerned with the Appellants’ appeals against specific tax and NICs decisions. The outcome will not be decided based on a generic view of how newsrooms operate, or how the BBC’s Editorial Guidelines are intended to be applied, but instead on the particular facts of the Appellants’ cases.’”
Published last week, the judgement relates to the BBC’s application to provide evidence as a non-party in relation to the IR35 appeals of its newsreaders Tim Willcox and Joanna Gosling, who are now BBC employees but were initially engaged by the corporation as PSCs.