Lorraine. Ms Kelly (K) provided services to ITV via her personal company (Albatel Ltd) in connection with TV programmes “Daybreak” and “Lorraine”. HMRC decided that the IR35 legislation applied to the arrangement between Albatel Ltd and ITV and demanded tax and NI.

Appeal.  Albatel Ltd appealed against HMRC’s decision on the basis that the nature and range of K’s work mean that she should be treated as a self-employed star. HMRC argued that there was mutuality of obligation due to the length of the contract which allowed for holidays in the same manner as an employment contract. It also stressed the point that K was obliged to perform for ITV and ITV was obliged to pay a minimum sum to Albatel Ltd even if the full contract was not fulfilled. Furthermore, K was not able to provide a substitute in her place, took no financial risk and could only work on other projects with ITV’s consent.

Decision. The FTT judgment focused on the circumstances as a whole, rather than isolated features. It found that there was mutuality of obligation but it was not determinative because ITV was not obliged to provide work for K and could drop the show if ratings fell. The FTT then considered the degree of control held by K and found that she was the “jigsaw” as opposed to a piece of it. K decided on the running of the programme, items to feature, vetoed location changes, prepared for the shows and dictated her choice of co-presenter to ITV. K was free to carry out other work and activities without any real restriction such as an expedition to Antarctica for four weeks which interfered with her availability to perform the duties for ITV. The considerable and varied activities of K led to the decision she could not be considered to be part and parcel of ITV. The appeal was therefore allowed.

Importance. This case is important because the fact pattern appears to follow Christa Ackroyd, a BBC presenter. The IR35 legislation was found to apply to that arrangement and the reason is that the BBC could call on Christa Ackroyd to present any show, in any location. Whereas K ran her own show which was based on her personal brand.

Tip. When considering the IR35 legislation it is important to analyse the reality of the arrangement rather than the terms of the contract. As shown in this case, the contract was drafted to provide ITV with some control but in reality, K was able to work on many other projects without restriction.

The full transcript can be found here

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