HMRC has been shown the tribunal’s door, which heard their appeal regarding presenter Kaye Adams’ engagements from 2015-2017. The Upper Tier Tribunal stood by the original decision made in 2019, stating that Adams was outside of IR35 during the dates in question.
This is a massive boon to contractors everywhere, and media presenters in particular, who seem to have attracted HMRC’s attention in particular. HMRC may be forced to let up on these crusades to go after high-profile cases, seeing how they have met with limited success in each case.
IR35 experts have stated that the case, which went through both the First-Tier and Upper-Tier Tribunals, did indicate slightly more optimism for HMRC at first, but their appeal failed because there were laws that were not in their favour. This indicates that contractors may have more footing in legal cases than HMRC had previously thought.
HMRC might also be less willing to seek legal assistance to adjudicate against contractors in Adams’ situation because the taxman was told that this case was unusual due to the nature of the contract, making it hard for HMRC to apply IR35 rules to Adams’ situation. This was because Adams was providing personal service, MOO was satisfied, and there was a control framework in place. While HMRC was certain that MOO had not been in play, the tribunal was able to see that Adams was clearly self-employed during the years in question.
Part of what made it clear that Adams was self-employed was the array of work she was engaged in. She did not have an employer, or she could not have been contracted with so many engagers at the same time. This may be a key factor in the future for contractors to prove their status during HMRC investigations.
Conduct of the Contract
HMRC was able to argue a single point during their case, related to a Supreme Court decision about a prior employment case, but it was not consequential in Adams’ situation. This was because there were no circumstances in the involved contracts which would lead to an inside IR35 ruling. This means that the circumstances of the execution of the contracts were what ultimately proved Adams’ status in this case. Contractors should be certain of the circumstances under which they are executing all engagements so as to avoid HMRC scrutiny and investigation.
With Off-Payroll on its way, contractors are urged to check on the execution portion of all of their contracts before IR35 goes into effect. Being able to prove that they are executing the contract correctly can be the difference between paying taxes they do not owe, and being able to prove their status without going before the courts.
