'Controlled' Christa Ackroyd loses IR35 appeal to HMRC

Christa Ackroyd has lost her IR35 appeal, cueing up HMRC to collect her ‘life-changing’ tax bill, in an IR35 case that is atypical but still with implications for limited company workers.

In an Upper Tribunal judgment published yesterday, judges said the FTT was right to back HMRC in deeming the BBC presenter inside IR35 from 2006 to 2013, due to Control.

In fact, whether the BBC had “sufficient control” over the Look North host was the sole point of law that the UT had to decide on, giving rise to four areas put -- in vain -- by her defence.

'A number of reasons'

They are; Implied Control, Framework of Control, Regulatory Control and Control by the BBC over the 62-year-old’s Output (the “eventual work product”) Vs. Input (‘what she did’).

But her team of Jolyon Maugham QC and Georgia Hicks, both of Devereux Chambers, failed to convince the judges on any of the four, with one area alone proving unconvincing “for a number of reasons.”  

This is even though Ms Ackroyd had no line manager and was not subject to appraisals by the BBC which, Mr Maugham rightly pointed out, lacked ‘effective sanctions’ to  control her.

'BBC held many of the cards'

Nonetheless, ‘Control’ is indeed what swung the UT judges to back HMRC, Qdos confirmed last night, as the evidence was that Ms Ackroyd “fell under” the broadcaster’s instruction.

Despite [her] having some autonomy,” the firm adds, “the BBC held many of the cards, from having ‘ultimate’ editorial control to ‘first call’ over her services for up to 225 days a year.”

“So for contractors to work outside IR35 compliantly, it’s important that they’re able to demonstrate they have a degree of control over how they provide their services.  

“This will include things like the place they work from and the hours they work. But most importantly, their method of work should not be controlled by the client.”

'Do not leave HMRC room for doubt'

Chartergates enforced, by saying: “The battleground in this appeal [by Christa Ackroyd] was the single issue of what level of control was exercisable by the BBC. 

“However, despite Ms Ackroyd maintaining that she was not in fact subject to control, the written agreements left the matter open to argument. 

“This is a salutary lesson for contractors to ensure that their written contract terms genuinely reflect their arrangements, and do not leave room for doubt or for argument by HMRC.”

Online, contractors yesterday showed sympathy to Ms Ackroyd -- the fourth BBC presenter of late to be found IR35-caught by a court. Tribunal records show all four were forced by the BBC to use PSCs.

'Feel sorry for her'

AR Tax is sympathetic towards her too, yet not unreservedly. It said:“[We] do feel sorry for [her] because she owes around £400,000 in tax…albeit before offsetting corporation tax paid.

“But should she have calculated a deemed PAYE payment given that she had a seven-year contract [overall, and] gave up working for the Daily Express at the request of the BBC?

“She was obliged to work 225 days; the BBC paid her a monthly fee -- rather than by show, and could…force her to do other things like public events. [And] she couldn't substitute.”

'BBC gave her no choice'

Status adviser Rebecca Seeley Harris is another IR35 expert who suggests that Ms Ackroyd (who said at her FTT hearing that was she scapegoated by the BBC), got a raw deal.

“Despite the BBC giving her no choice but to work through a limited company, she will now also have to pay the employer's NI contributions,” the adviser wrote on LinkedIn.

But contractors might be reassured that the Ackroyd appeal is “not a typical IR35 case”, according to Qdos’ CEO Seb Maley.

“Given [she] was reportedly forced to work as a contractor by the BBC, this shouldn’t necessarily be considered a win for HMRC….[nor is it] a typical IR35 case either, given contractors aren’t usually pushed into working arrangements,” he said.


Former tax inspector Matt Boddington, a director at Chartergates pointed out the other atypical circumstances.

“Due to the fact-sensitive nature of IR35, it is unusual for an IR35 dispute to progress beyond the First-tier Tax Tribunal [FTT], and for the higher courts to provide binding guidance.”  

He added: “While clearly a disappointing outcome for Christa Ackroyd, it is pleasing to see that the Upper-tier Tax Tribunal has reinforced the core elements of the IR35 test: a requirement for personal service, sufficient control and -- in direct contradiction of HMRC’s official position -- a requirement for mutuality of obligation.”

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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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