In the latest of a continuing series of IR35 disputes coming before the Tax Tribunals, Adrian Chiles, widely known for his business programmes, media presenting and football anchor activities, has claimed a resounding victory over HMRC.
Mr Chiles’ company, Basic Broadcasting Ltd (BBL), was appealing against assessments made under the intermediaries’ tax legislation (IR35), claiming a combined income tax and National Insurance bill of £1.7m for the years 2012 to 2017.
At the conclusion of the long running dispute with HMRC, Mr Chiles’ legal team successfully persuaded a First Tier Tax Tribunal in November 2021 that he was clearly in business on his own account and that the services provided by his company to the BBC and ITV were under contracts for services and not contracts of employment.
Mr Chiles’ case was complex and the hearing lengthy. HMRC were widely criticised for the long delays in conducting their investigations which were compounded by the original Tribunal’s judge suffering long COVID, requiring a partial re-hearing of the appeal.
The usual approach was taken by the Tribunal, hearing evidence about the BBC and ITV contracts which was accepted as being conclusive of there being ‘mutuality of obligation’ in the arrangement.
It also took a close look at ‘control’ and determined that, in this case, the detail of the services as defined in the TV contracts gave little scope for the broadcasting companies to control or direct what Adrian Chiles did. As such, control was not a compelling factor in their decision.
The Tribunal also closely examined the evidence provided by Mr Chiles’ counsel to support their contention that, being in business on his own account, trumped any case for arguing that Chiles was an employee.
It was pointed out that Mr Chiles’ use of an agent to find and help negotiate contracts, for which he paid a 15% gross commission, was not an expense an employee would expect to incur.
The evidence showed that, as well as several other convincing pointers to self-employment, Mr Chiles had provided his services as a broadcaster and journalist to several dozen different third party clients for the period in question.
There were also frequent references throughout the hearing, to another high-profile media personality case - that of Kay Adams of Loose Women fame who also won her appeal and whose argument that she was more of an entertainer and a ‘brand’ and therefore self-employed and not an employee.
The Tribunal’s view that it was necessary to ‘stand back and look at the circumstances as a whole’ is something that was open to HMRC at the outset of the investigation. It is unfortunate that Adrian Chiles had to suffer the shadow of these unnecessary proceedings for such a prolonged period before the being vindicated before the Tribunal.
It’s also to be hoped that HMRC will not seek retribution for their loss by requesting an appeal to the Upper Tier Tribunal. They should accept their defeat and learn a little humility for having got it so wrong.
