IR35-fatigued Kaye Adams wins her tax case, but HMRC says it might not be done yet

Kaye Adams last night retweeted a tweet stating her IR35 battle with HMRC has “taken [her] to the edge of insanity”, on the day a judgment showed that battle may now be over -- with her the victor.

The Loose Women presenter further effectively endorsed the tweet, from Chris Daw KC, by reposting the barrister saying her nine-year tax spat threatened the 60-year-old with “financial ruin”.

Adams signalled the financial and mental toll of repeatedly defending her outside IR35 status in court was significant when she compered IPSE’s Freelancer Awards 2023, three months before the October hearing which has now vindicated her.

'Freelance for more than 20 years'

It is the judgment from that hearing at the First-tier Tribunal Tax Chamber (which was ordered to be held by the Court of Appeal), which was released yesterday.

And it is this FTT judgment which now formally confirms Adams’ initial hints early yesterday on social media that she’s seen off HMRC, specifically on her BBC Radio Scotland contracts of 2013-14 and 2016-17.

The two-person legal team for Adams’ limited company, Atholl House Productions, last night issued confirmation of its own that the “freelance journalist for more than 20 years” (56:1), had beaten the Revenue.

'The importance of looking at the big picture'

Temple Tax Chambers’ Ximena Montes Manzano reflected: “The outcomes of the FTT remitted hearing is in -- the engagement between BBC Scotland and Atholl House Productions was not caught by the IR35 rules.

“The FTT thoroughly considered the importance of looking at ‘the big picture.’”

Also of Temple Tax Chambers, Keith Gordon posted: “The one regret about this case is the fact that it provides a clear example of how compliant taxpayers can get badly hurt by poorly targeted legislation -- even when they ultimately prevail. The radio and TV world (and all contractors) owe Kaye a lot for her perseverance.”

'Deciding next steps'

But HM Revenue & Customs is signalling that it might not be done with Adams just yet.

An HMRC spokesperson yesterday told ContractorUK: “It is our duty to ensure everyone pays the right tax under the law, regardless of wealth or status. We are disappointed in the tribunal’s decision and will consider the judgment before deciding next steps.”

Andrew Webster, managing director of Workwell Enterprise says the case has been “dragging its heels” already.

'Protracted pursuit'

“[This is] a further but not surprising example of HMRC’s protracted pursuit of a well-known broadcaster,” Mr Webster added in a statement to ContractorUK.

“Notwithstanding the nearly decade-long battle, a concern is how much taxpayer money has been wasted, not only on representation at tribunal but on [past] possible recourses for Adams.”

“This outcome is fantastic news for Kaye Adams who, staggeringly, has had this case hanging over her head for almost 10 years,” says Charlie Hemsworth, senior tax consultant at Bauer & Cottrell (B&C).

“This was the first IR35 case -- since Kickabout Productions Ltd -- to reach the Court of Appeal. And more than anything else, it highlights the incredible lengths that HMRC will go to argue their position on IR35 status.”

'HMRC will now retract its claws'

Even one of the Revenue’s former inspectors says trying but failing four times in a row against Adams should cause it to take a long hard look at itself.

“Hopefully HMRC will now retract its claws and realise its one-track-mind approach doesn’t serve any real purpose,” the ex-tax official, Carolyn Walsh told ContractorUK.

“The backstory of the Adams case is that a failure was noticed [by the tax office] in the way in which the BBC rolled out contracts; reportedly ‘haphazard.’

“But rather than looking through those contracts individually and carefully to unearth the facts, HMRC just took the stance that any BBC presenter seemed to fall under suspicion.”

'Considerable Mutality, significant Control'

A ‘careful unearthing of the facts’ is a fitting way to describe the 75-page FTT judgment in favour of Atholl House.

At times however, it almost reads as an open-and-shut case for HMRC.

There was a “substantial” time commitment required of Adams for each hypothetical contract; the dominant feature was personal service, and substitution could have applied only in “very limited” circumstances (it never was).

The extent of mutuality of obligations found by FTT judge Tony Beare was “considerable,” and “similarly, the rights of control which were exercisable by the BBC…were significant.”

'Clearly integral to the BBC's activities'

Adams was also “clearly integral to the activities of the BBC;” and the length of the relationship between the BBC and Adams was a sign-post to employment (she began work at the broadcaster back in 2010).

But in the first of many counterbalances, judge Beare said the time-commitment point was “tempered” by Adams “for many years being engaged by many organisations other than the BBC…both consecutively and concurrently”.

In a further boon for PSCs with a long service history at a single client, the tribunal reminded that “it is perfectly possible for a worker to retain the status of self-employment over many years”.


And at the BBC, Adams had no holiday or sick pay, no maternity leave or pension entitlement; was not entitled to a review; was not subject to BBC formal procedures and couldn’t apply for internal jobs.

She also was a “brand;” had to provide her own equipment and use her own clothing, but was not permitted to access BBC systems from her home.

Of lesser clout but still relevant, there was also an “unequivocal statement in each written agreement to the effect that the parties did not intend to create a relationship of employment.”


Judge Beare explained: “Whilst the last of the above points is by no means determinative, it is capable of carrying weight in a case which is finely-balanced, which we consider this case to be.”

“With the FTT re-confirming that IR35 does not apply, the case offers valuable insights for both contractors and engagers and reinforces the importance of a nuanced approach to establishing IR35 status,” says Bauer & Cottrell’s Ms Hemsworth.

“It underscores the need for a thorough examination of the entire picture. In Adams’ case, despite the length of time she worked for the BBC, factors outside of her relationship with the BBC and her historical career as a freelancer demonstrated that she is clearly ‘in business’ on her own account. And this played a very important role in the decision.” 

'When one stands back'

In line with the senior tax consultant’s analysis, judge Beare said: “When one stands back and considers the various factors as a whole…the hypothetical contracts appear to us to be contracts for services and not contracts of service.”

IR35 contract review expert Seb Maley, CEO of Qdos said: “If there’s a case that demonstrates the complexity of IR35, the potential cost of getting things wrong and HMRC’s clumsy approach to ensuring compliance, it’s the Kaye Adams case.”

Totting up a reported £140,000 liability around Adams’ neck had she lost, Mr Maley says he fears it won’t be the last time contractors see HMRC “relentlessly” pursue a high-profile individual.

'Proves freelancers can be IR35-compliant'

“IR35 can be made complex in circumstances where it does not need to be,” explains Workwell Enterprise’s Mr Webster.

“[But the Adams case] proves that where freelancers whether in the media, engineering or technology sectors make a career decision to go contracting, and then take their employment status seriously, they can provide services compliantly under IR35.”

But at B&C, Hemsworth isn’t so sure the average IT contractor will identify with a celebrity like Adams.

'Not precedent-setting'

She told ContractorUK: “In Atholl, the appellant was fortunate enough to be able to afford the huge legal costs to get this far, but many wouldn’t be in such a fortunate position.  

“One hopes that the conclusion of this not precedent-setting case may encourage HMRC to adopt a more comprehensive and holistic approach in how they give weight to various factors in future cases, and in their general approach to IR35 status.

“But HMRC were probably optimistic because the Court of Appeal had concluded that both the FTT and the Upper Tribunal had erred in law in making their decisions, and incredibly they can still appeal this latest outcome. I really hope for the sake of Ms Adam’s sanity -- and purse -- that they let this go now.”

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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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