After losing yet another IR35 case, IPSE's Andy Chamberlain raises three important questions for government when it comes to IR35 and how businesses are expected to operate.
HMRC thought Lorraine Kelly, yes – the Lorraine Kelly – was operating inside IR35. They were wrong. It’s the highest profile IR35 case there has ever been, and they were asking for the biggest amount of money ever in an IR35 case (£1.2m) and they have lost – emphatically.
This case came down to control – who controls the work that Kelly does? Is it ITV or Kelly herself? The tribunal was clear – it’s Kelly. They described Kelly as a ‘brand’, an entertainer who puts on a performance:
“In our view ITV was not employing a “servant” but rather purchasing a product, namely the brand and individual personality of Lorraine Kelly. We concluded that all this supports the conclusion that the Appellant was in business on its own account.”
Ultimately the tribunal found that not only did IR35 not apply, but that it clearly didn’t apply:
“In our view the level of control falls far substantially below the sufficient degree required to demonstrate a contract of service and we are satisfied that the factors strongly indicate that the contract was one for services.”
This is the fourth case that HMRC has lost out of the five that have come to light in the last year. This appalling track record raises some obvious questions:
IPSE will use it’s position on the IR35 Forum to put these questions directly to HMRC.
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