Employment Taxes – IR35 Challenge for BBC

HMRC recently won a First Tier Tribunal (FTT) appeal in what is anticipated to be the first of many IR35 challenges on the arrangements of BBC presenters.

The appeal concerned the use by the BBC of ‘off-payroll’ arrangements for its presenters, a practice which has received widespread publicity over recent years. The issue at hand was that many BBC presenters were engaged by the BBC through their personal service companies (PSCs) rather than directly as either employees or self-employed freelancers.


The case here concerned the former Look North presenter, Christa Ackroyd, who engaged with the BBC to provide her services via her PSC (‘Christa Ackroyd Media Ltd’). Ackroyd was appealing against demands for some £420,000 from HMRC for tax and National Insurance Contributions (NICs) relating to the tax years 2006/07 to 2012/13.

HMRC argued that her status was that of an employee and that her company was therefore caught under IR35 and should account for tax and NICs accordingly. The FTT found in HMRC’s favour, on the basis of mutuality of obligation; sufficient control of what, when, where and how Ackroyd performed her role; and the fact she couldn’t provide a substitute.

The fact that she entered into a seven-year contract for at least 225 days per year meant that Ackroyd’s work at the BBC was pursuant to a highly stable, regular and continuous arrangement – as the FTT commented ‘effectively a full-time job’. It involved a high degree of continuity rather than a succession of short term engagements – a key pointer towards an employment contract.

HMRC commented that: ‘Employment status is never a matter of choice; it is always dictated by the facts and when the wrong tax is being paid we put things right.’

HMRC has struggled since its introduction to enforce the IR35 rules effectively, and the fact that this is the first IR35 ruling for seven years is notable. The rules for off-payroll working in the public sector were changed significantly from April 2017, with responsibility for determining employment status taken away from the worker/PSC. HMRC has already confirmed it will make similar changes to private sector work within the next few years.

HMRC has reportedly opened 100 investigations into BBC presenters. Whilst this case is not a lead case, it will be seen as a setback for the other appellants.

The employment status rules and IR35 can be complex, and getting it wrong can be lead to significant tax/NIC liabilities. Please speak to us if you have any queries in this respect.

Contact us: hello@garbutt-elliott.co.uk – 01904 464 100