IR35 Case – Christa Ackroyd Media Limited vs HMRC
Posted on 20th February 2018 at 19:30
The first IR35 ruling in seven years has today seen a defeat by HMRC of BBC presenter, Christa Ackroyd. The “Look North” presenter today lost her first-tier tribunal – resulting in an income tax and National Insurance bill in excess of £400k.
Being the first judgement in seven years and first since the public-sector reforms in April 2017 this has caused quite a stir in the industry – not least due to Christa’s public profile.
With the consultation into rolling out the IR35 reforms into the private sector announced only a few months ago, it is no surprise that contractors across the country are keen to understand the key aspects of this case.
The keys details
Christa Ackroyd was contracted as a television presenter for BBC between 2006/07 and 2012/13.
She provided her services via a personal service company, Christa Ackroyd Media Limited. In her statement, Ms Ackroyd noted that her decision to operate to provide her services in this way was at the suggestion and insistence of the BBC.
Ms Ackroyd’s husband acted as her accountant, but she also sought advice on the contract and IR35 status from another accountant, who assured her everything was in order for her to work outside of IR35.
The Tribunal concluded that Ms Ackroyd was caught by IR35 in that she was effectively employed by the BBC. Reasons provided were as follows:-
The contract restricted Ms Ackroyd from providing her services to other clients. This removes independence and shows a lack of business-like working.
Ms Ackroyd was contractually required to make herself available to the BBC for a minimum of 225 days per year and furthermore, the BBC was contractually required to pay Ms Ackroyd for these 225 days regardless as to whether she worked or not. This is a clear indicator of employment and mutuality of obligation (MOO).
As the BBC had ultimate editorial control, Ms Ackroyd had minimal control over the way in which her role was performed. This meant that she failed on Supervision, Direction and Control.
As Ms Ackroyd was a known public figure being a figure and part of the Look North brand, it would not have been an option for her to send a substitute should she be unable to work.
For me, and industry experts agree, this case was clear from the outset. There was very little grey area in this case and as Dave Chaplin of ContractorCalcuator commented, “her engagement with the BBC simply contained too many factors pointing towards an employment relationship”.
This case highlights the need for expert advice from a qualified and experienced IR35 accountant. A general accountant may not have the specific industry knowledge to provide an opinion of a contractors IR35 status and the ability to carry out a thorough IR35 Contract and Working Practices review. Had Ms Ackroyd had this support from the outset, her position would have been made clear earlier.
I have a wealth of experience in IR35 having worked specifically within the contractor accounting sector for over 9 years. Please do get in touch for a chat or to arrange an IR35 review.
Further reading: Case Notes here
Nicola J O'Sullivan -
Founder | Xero Champion | IR35 Expert
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