Loose Women presenter Kaye Adams wins IR35 appeal

A Loose Women presenter has become the latest TV personality using a limited company to beat the taxman at his own IR35 legislation.

Kaye Adams, 56, was told by a First-Tier Tribunal last month that her appeal against HMRC’s IR35 demand of £124,000 for two yearly BBC contracts “should be allowed.”

Being in business of her own account – so much so that the BBC did not have ‘first call’ on her time; and being distinctive from BBC staff, helped judge Tony Beare reach his decision.


But it wasn’t a walkover for Adams, MD of Atholl House Productions Ltd, because the judge backed the BBC in deeming her substitution clause in the 2016/2017 contracts as meaningless.

She also “did not in any meaningful sense provide her own equipment”; she “ran no financial risk” and, often more determinative, Mutuality of Obligation existed (“entitled to be paid come what may”).  

Yet these three status factors in favour of HMRC’s case highlight just how strongly in business on her account Adams was or, more specifically, how much stock the judge put in it.


“The judgment on ‘Control’– often the clincher -- is sloppy, inconclusive at best,” a tax expert says. “The main reason for [Adams’ win] is being in business on one’s own account.”

“Inarguably she [Adams] is in business in her own right,” agreed the FCSA. “She is clearly a freelancer and has been working for a number of media outlets for the past 20 years.”

Status firm Qdos last night confirmed what swung the case, saying the fact that the BBC did not have ‘first call’ on Adams’ time, and did not control her other engagements, was key.


“[This] started to paint a picture that she belonged outside IR35,” said the firm, citing 30% of her income being non-BBC. “The case notes describe this [the ‘first call’ point] as ‘crucial.’”

Probably wrongfooting HMRC, the agreement between Adams’ PSC and the BBC for the show at the heart of the case – The Kay Adams Programme, stated the opposite.

Specifically, both the 2016 and 2017 agreements say the BBC had ‘first call’ on Adams’ time, and say she needed to obtain the BBC’s permission for non-BBC engagements.

'Very creditable'

But judge Beare preferred what actually happened in practice over the written terms, as Adams and programme editor Colin Paterson, each “very creditable”, outlined the contrary.

“The evidence of both Ms Adams and Mr Paterson was to the effect that the BBC simply did not have the right of first call…or the right to control [her] other engagements”, he found.

Seb Maley, chief executive of Qdos reflected: “[It’s] another example of HMRC scrutinising a written contract without taking the reality of the working practices into account.

“While the written contract is, of course, hugely important, actual working practices will often be pivotal in an IR35 case.”

'Flawed approach'

Julia Kermode, CEO of the Freelancer & Contractor Services Association, said: “HMRC pursued the case on the basis of editorial control that was contractually held by the BBC”.

“This case demonstrates that HMRC’s approach, fixating on just one element of IR35, is flawed and that the bigger picture of someone’s employment status must be considered”.

The tax expert, speaking on condition of anonymity, said: “The lesson here is that HMRC cannot rely on what the contract says if both parties say that it doesn’t mean what it says.

“And they very often won’t, when a big corporation gets a team of lawyers to write a contract so complicated that neither the contractor nor the managers on the ground ever look at it.”

'In the round'

This implied ‘pinch of salt’ for paperwork and the terms, in favour of the overall picture was not lost on judge Beare. Indeed, his championing of this approach sealed Adams’ victory.

“Those two tax years of assessment need to be considered in the round, in the context of Ms Adams’s professional career as a whole,” his judgment states.

“This is because Ms Adams’s engagement with the BBC did not occur in isolation. Instead, it was just part of her overall professional career…as an independent provider of services.”

'CEST would not capture'

Matt Boddington, director of employment law specialists Chartergates said: “A standout feature is the extent to which the FTT considered Ms Adams’s BBC engagement as part of her professional career as a whole.

“So not just in relation to concurrent work she was doing outside the BBC -- which was contrasted with Christa Ackroyd’s case -- but including the overall picture of her engagements before and afterwards. 

“Taking this approach paints a picture of a professional independent provider of services, not an employee. Interestingly, this approach is something which CEST would not capture.”

HMRC 'can't cope'

Meanwhile, the tax expert, a chartered adviser said: “Significantly for contractors…[this case shows] that a medium-term contract – in this case of a year – is perfectly compatible with self-employment

“[And as in] Hall V Lorimer, the judge actually came to his main conclusion without relying on the terms of the contracts at all. 

“Both these notions are contrary to the way HMRC actually looks at things and the latter one explodes their whole way of looking at things – they simply can’t cope with this sort of reasoning -- CEST certainly can’t.”


But it is not just the Revenue’s tool that the ruling for the taxpayer (who had no entitlement to sick pay, holiday pay, maternity leave or pension, as BBC employees do), is being seen to undermine. It is also the tax authority itself.

“Adams’s victory is yet another example of HMRC’s complete failure to understand its own labyrinthine self-employed tax laws,” says Andy Chamberlain, deputy director of contractor body IPSE.

"This is the fifth of six IR35 cases HMRC has lost since it made its disastrous changes to IR35 in the public sector in 2017.”  

At Qdos, Mr Maley asked: “How many more genuinely self-employed freelancers and contractors must needlessly endure an IR35 case before an independent review into HMRC is launched?

“You certainly start to wonder when and if HMRC will be held accountable. It is, of course, concerning that HMRC can’t seem to grasp the very legislation it designed and attempts to police.”

Ms Kermode, at the FCSA takes a similar view. “Once again, we are seeing a high-profile presenter coming under the [HMRC] spotlight, and wrongly so,” she said.

“The fact that HMRC continues to lose such cases surely demonstrates that it does not understand its own legislation.”

'Warning bell'

All three critics of the Revenue said the court defeat – the latest in a long line of HMRC losses on IR35 – was all the more concerning given that, quite at odds with learning lessons, the taxman’s plan is to rollout further changes.

“This [defeat] should be a loud warning bell to the government not to extend the hugely damaging changes to IR35 to the private sector next April,” said Mr Chamberlain.

“When HMRC clearly cannot understand these tax laws, how can they possibly expect businesses across the UK to?”

'No comfort'

The FCSA said: “This [defeat] is no comfort at all as businesses prepare for the off-payroll reforms to reach the private sector in April 2020”.

“[Then], companies will be required to assess the IR35 status of the freelancers and contractors they hire -- something that HMRC’s ‘experts’ themselves seem incapable of doing with any accuracy.”

Qdos said: “[In this case], HMRC has wrongly pursued a genuine contractor for what it believes is thousands in missing tax. Worryingly, this is becoming common practice. With further reform on the horizon, this case emphasises the importance of being confident in [your] IR35 status”.

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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