BBC presenters lose IR35 appeal

[JohntheBike]

I hope the presenters now go to BBC and recoup 6 years worth of annual leave and employee benefits.

well said, it's about time someone did this.

[JohntheBike]

Completely agree with you.

However... the cynic in me (and I believe many others) says it is in the interests of HMRC and HMT to keep it just vague enough that they can cast their net as widely as possible to pull as many people into false deemed employment as they can. To tighten up rule definitions gives people a chance to find and exploit weaknesses.

agreed

[simes]

well said, it's about time someone did this.

Well, if the BBC help their contractors out with the back taxes, (as I believe I have read elsewhere in respect of other similar cases at the Beeb) then I daresay that avenue will not be open to them.

But in another case, if not already known, Susan Winchester did just this. And won.

[Hobosapien]

But it has been re-iterated many times by the judiciary that deciding employment status cannot be a box ticking exercise. All factors must be taken into account and appropriate weight attached to those factors. The overall picture must be considered. No computer based process is ever going to be able to do that, if only because judges will have their own personal, if not political, perspective of the issues. Remember that the "Commissioners for Taxes" have now had their name changed to the First Tier Tribunal. I wonder why?

The only way that this mess can be resolved is for employment status to be determined by one court and then the 1TT and the ET will decide the implications in relation to tax or benefits as appropriate. This will never happen in my opinion, unless one particular political party sees it as a vote winner at any one time.

The judiciary are only in the picture if HMRC decide to investigate and it ends up in court.

HMRC say they will stand by the findings of CEST, so the main issue is with the quality of it. Perhaps they do want to leave it vague enough to not be a simple logic based decision, so the grey area of court outcomes leaves them a way of pursuing cases that outmanoeuvred their ideals yet still conformed to CEST appropriately. i.e. they want to stand by CEST until they don't.

That link to CEST makes it sound clear cut for those looking to use the tool. It's when HMRC tweak the behaviour of it and clients use it multiple times during a contract (at the start and at each renewal) that the risk of a suddenly different client determination puts the whole thing into a risk that needs further mitigation.

If they want to get private sector clients on side then a fit for purpose CEST is the best way of doing it. Then investigations and court action will be for those that abused the tool as it warns in the summary page.

[WordIsBond]

That's why the CEST tool needs to be fit for purpose and the result fit to stand up alone without any additional grey area.

Should be simple if the rules are so clear and logical that a tool can be used. Why they can't have CEST static in the content and therefore outcome shows HMRC need to tighten up their rule definitions so it's clear what is being asked when the client comes to use the tool.

If CEST was comprehensive enough and complete (no change to CEST unless there's a change to employment law) then everyone would know where they stood and could plan accordingly.

CEST never asks if I am employing staff or subcontractors and providing their services also (whether part or full-time) as part of my contract. It never asks if those employees are former employees of the client, or whether some of them are.

It never asks if my client has a UK presence.

It never asks if I'm paying for/providing 7 laptops, instead of one.

If I had a contract that included MOO, SDC, and no right of substitution, but the client were foreign and I were providing 7 people as well as myself, would that be inside IR35? Can CEST possibly determine that? Can it really be constructed to evaluate every possible situation?

CEST should probably never give an 'inside' ruling, at most it should say, 'Inside if there are no other key factors relating to employment, this engagement is inside.' A tool like this is simply not able to be consistently definitive because no government has had the courage to ever legislate a definition of self-employment vs employment. Lacking such a definition, software can't make the determination.

[JohntheBike]

The judiciary are only in the picture if HMRC decide to investigate and it ends up in court.

HMRC say they will stand by the findings of CEST, so the main issue is with the quality of it. Perhaps they do want to leave it vague enough to not be a simple logic based decision, so the grey area of court outcomes leaves them a way of pursuing cases that outmanoeuvred their ideals yet still conformed to CEST appropriately. i.e. they want to stand by CEST until they don't.

That link to CEST makes it sound clear cut for those looking to use the tool. It's when HMRC tweak the behaviour of it and clients use it multiple times during a contract (at the start and at each renewal) that the risk of a suddenly different client determination puts the whole thing into a risk that needs further mitigation.

If they want to get private sector clients on side then a fit for purpose CEST is the best way of doing it. Then investigations and court action will be for those that abused the tool as it warns in the summary page.

HMRC have already tried to prevent evidence from their CEST tool from being presented in court in the Alcock case. So it has already been proven that they are not willing to stand by the results of CEST. Clearly it's a complete farce. It can never be relied upon in any way to determine the correct employment status. It can only be relied upon to class contracts as subject to IR35 and not when it classes them as not subject to IR35. It's really about time someone should drive a horse and cart through all these issues and get some legally binding clarity.

All seems to have gone suspiciously quiet in the Alcock case. No one seems to be allowed to make any comment, even to the point of not publishing when or if a hearing is to take place.

[JohntheBike]

CEST never asks if I am employing staff or subcontractors and providing their services also (whether part or full-time) as part of my contract. It never asks if those employees are former employees of the client, or whether some of them are.

It never asks if my client has a UK presence.

It never asks if I'm paying for/providing 7 laptops, instead of one.

If I had a contract that included MOO, SDC, and no right of substitution, but the client were foreign and I were providing 7 people as well as myself, would that be inside IR35? Can CEST possibly determine that? Can it really be constructed to evaluate every possible situation?

CEST should probably never give an 'inside' ruling, at most it should say, 'Inside if there are no other key factors relating to employment, this engagement is inside.' A tool like this is simply not able to be consistently definitive because no government has had the courage to ever legislate a definition of self-employment vs employment. Lacking such a definition, software can't make the determination.

agreed absolutely!

[webberg]

. Remember that the "Commissioners for Taxes" have now had their name changed to the First Tier Tribunal. I wonder why?

.

That is incorrect.

H M Commissioners of Revenue and Customs are a body appointed to run the tax assessing and collection in the UK.

Many years ago there was a body called the General Commissioners who were persons of character and probity from the local community who could be brought together to hear disputes between HMRC and taxpayers and bring independence and common sense to the party.

Where the dispute could not be settled there or involved matters of law the Special Commissioners could be called upon. These were usually people with some legal/tax training.

That system was swept away.

Now, if you cannot agree a position with HMRC, you can go to the First Tier Tribunal which is staffed by Judges and aides and have your case heard. Still independent but now with legal knowledge.

If you cannot agree at that level, you go to the Upper Tier Tribunal.

[webberg]

I hope the presenters now go to BBC and recoup 6 years worth of annual leave and employee benefits.

Not possible.

The decision made in the TAX court is for TAX purposes only.

Just because you pay tax at the same rate as an employee DOES NOT make you an employee.

[webberg]

But in another case, if not already known, Susan Winchester did just this. And won.

No, she did not.

There never was a case.

It was settled out of Court.

Nobody knows why the settlement was made.

We can speculate and guess, but never know.

She did not win because there was no contest.